Directors Report of Ajanta Pharma Ltd.
Mar 31, 2023
Your directors have pleasure in presenting Forty-Fourth Annual Report and Audited Financial Statements of the Company for the Year ended 31 March 2023.
|
Summarised Position of the Financials Statements is Given Below: |
(H cr.) |
|||
|
Particulars |
Consolidated |
Standalone |
||
|
Year ended 31 March |
2023 |
2022 |
2023 |
2022 |
|
Revenue from operations |
3,743 |
3,341 |
3,411 |
3,141 |
|
Other Income |
99 |
116 |
133 |
140 |
|
Profit before Depreciation, Finance Costs and Tax expense |
882 |
1,045 |
832 |
1,031 |
|
Profit after Tax |
588 |
713 |
559 |
720 |
|
Total Comprehensive Income |
603 |
705 |
556 |
720 |
|
Earnings Per Share (EPS) (H) (Basic) |
45.89 |
54.97 |
43.61 |
55.52 |
) FINANCIAL PERFORMANCE REVIEW
The Consolidated and Standalone Financial Statements for the year ended 31 March 2023 have been prepared in accordance with the Indian Accounting Standards (Ind AS), Section 133 and other applicable provisions of the
The Company discloses consolidated and standalone financial results on a quarterly basis, which are subjected to limited review and publishes consolidated & standalone audited financial results annually.
Company continues to be engaged in development, manufacturing and sale of specialty pharmaceutical formulations with specific emphasis on branded generics in various therapeutic segments in India and more than 30 countries worldwide.
During the year under review, Consolidated Revenue from Operations augmented at H 3,743 cr., 12% higher than the previous year. Consolidated Profit After Tax stood at H 588 cr. lower by 175% then the previous year due to abnormal increase in raw material and freight costs. Exports contributed 68% of the revenue.
During the year under review, the Board had declared an interim dividend of H 7/- per equity share at its meeting held on 3 November 2022. Total dividend payout was H 89.69 cr. The Board recommends interim dividend to be considered as final dividend for FY 2023.
Companies Act, 2013 (âAct") and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulations").
Dividend payout is in accordance with the Company''s Dividend Distribution Policy and the same is available on the website of the Company and can be accessed at https://ajantapharma.com//images/DividendPolicy.pdf
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
The Company has Four overseas subsidiaries and it does not have any Associate company or Joint Venture.
Salient features of the Financial Statements of subsidiaries are provided in the AOC-1 statement annexed herewith as "Annexure A".
Audited Financial Statements of subsidiaries are available on Company''s website at www.ajantapharma.com and the same are also available for inspection at the Registered Office of the Company during business hours as stipulated under Section 136 of the Act. The same will be made available to interested members upon getting request.
Ajanta Pharma USA Inc. is a material subsidiary in accordance with the provisions of the Listing Regulations read with the Company''s âPolicy on Material Subsidiaries". The policy can be accessed at https://ajantapharma. com//images/PolicyonMaterialSubsidiaries.pdf
There was no change in authorised share capital of the Company during the year under review.
O Employee Stock Option Scheme
Company has formulated and implemented Ajanta Pharma Share-Based Incentive Plan 2019 (âSBIP 2019") which is administered by the Nomination and Remuneration Committee (âNRC"). There was no change in the scheme during the year.
During the year under review, 1,000 shares were issued and allotted against the options exercised. Disclosures with regard to SBIP 2019 are put up on the Company''s website and can be accessed at https:// www.ajantapharma.com/ajanta/Investors/annual_ results/?year=2022-23.
M/s. Alwyn D''Souza & Co., Secretarial Auditors have issued certificate confirming that SBIP 2019 has been implemented in accordance with the SEBI Regulations and the resolution passed by members in general meeting. The certificate will be available for inspection by members at the ensuing Annual General Meeting (âAGM").
Board of Directors had at their meeting held on 10 May 2022 approved issue of bonus shares to the members in the ratio of 1:2 i.e. one new fully paid-up equity share of H 2/- each to be issued for every two equity shares held. Post bonus issue, paid-up equity shares of the Company stood increased from 8,54,16,770 equity shares to 12,81,25,155 equity shares of H 2/- each.
Issued bonus shares in the ratio of 1:2O Buy-back of Shares
At the meeting held on 10 March 2023, Board had approved buy-back of 22,10,500 (Twenty-two lakhs ten thousand five hundred) fully paid-up equity shares of the face value of H 2/- each, from the existing shareholders / beneficial owners of equity shares of the Company on a proportionate basis, through âTender Offer" route, at a price of H 1,425/- (Rupees One Thousand Four Hundred and Twenty-Five only) per equity share, for an aggregate amount of H 315.00 cr.
Share buy-back amounting to L 315 cr. during the year
Buy-back represented 2.59% (not adjusted for bonus undertaken by the Company) of the subscribed and paid-up equity share capital of the Company. Post Buyback, the paid-up share capital stood reduced from 12,81,25,155 equity shares to 12,59,14,655 equity shares of H 2/- each.
Company''s bank facilities are rated by Credit Analysis and Research Limited (âCARE"). They have assigned rating CARE AA/CARE A1 for long-term/short-term bank facilities, which connotes stability. This reaffirms the reputation and trust the Company has earned for its sound financial management and its ability to meet its financial obligations.
©DIRECTORS AND KEY MANAGERIAL PERSONNEL
Board of the Company comprise of renowned professionals from different walks of life. They bring in diversified competencies, domain knowledge and experience. Right combination of Executive and Independent Directors draws fine balance of business acumen and independent judgement on Board''s decisions.
During the year under review, none of the Non-Executive Directors had any pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses, if any.
At the meeting held on 1 February 2023, the Board had approved re-appointment of Mr. Yogesh M. Agrawal as Managing Director of the Company and Mr. Rajesh M. Agrawal as Joint Managing Director of the Company for an another term of 5 years. Both the appointments were approved by Shareholders on 9 March 2023 through postal ballot.
Mr. Madhusudan B. Agrawal retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment.
All the Independent Directors have confirmed that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and under the Listing Regulations. They have registered their names in the Independent Directors data-base and have passed the proficiency test, if applicable. They have also affirmed compliance to the Code of Conduct for Independent Directors.
Based on disclosures provided by them, none of them are disqualified/debarred from being appointed as Director under Section 164 of the Act/SEBI order or any other authority and are independent from the management.
The Board is of the opinion that the Independent Directors possess requisite qualifications, experience and expertise in the fields of manufacturing, operations, finance, forex, people management, strategy, sales & marketing, auditing, banking, risk management and they hold high standards of integrity. Skill set, expertise & competencies matrix of all the Directors is provided in the Report on Corporate Governance forming part of this Annual Report.
O Policies on Appointment and Remuneration of Directors
Policy for Determining Qualifications of Directors sets out guiding principles for selection of persons who are qualified to become Directors/Independent Directors.
The objective of Policy for Remuneration of Directors and Employees is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, Key Managerial Personnel (âKMP") and Senior Management employees.
The same are briefly mentioned in the Report on Corporate Governance.
The policies are available at:
https://ajantapharma.com//images/
PolicyfordeterminingqualificationsofDirector.pdf
https://ajantapharma.com//images/
PolicyforRemunerationofDirectorsandEmployees.pdf
O Key Managerial Personnel
Mr. Yogesh M. Agrawal, Managing Director; Mr. Rajesh M. Agrawal, Joint Managing Director; Mr. Arvind K. Agrawal, Chief Financial Officer and Mr. Gaurang C. Shah, Company Secretary, are the KMPs of the Company as on the date of this report.
O Board and Directors'' Evaluation
As per provisions of the Act and Regulation 17(10) of the Listing Regulations, the performance evaluation of the Board, Board committees and individual Directors was carried out by the Board, in accordance with the Policy on Board Evaluation,
criteria laid down which are in alignment with the best corporate governance practices.
Further, at a separate meeting, the Independent Directors evaluated performance of NonIndependent Directors, Board as a whole and of the Chairman of the Board.
A consolidated report on performance evaluation was shared with the Chairman of the Board for his review and discussion with Board and each Director.
The manner of evaluation of Board of Directors performance and matters incidental thereto, are detailed in the Report on Corporate Governance.
^ BOARD MEETINGS
Board of Directors of the Company met 5 times during the year under review. Details of meetings are given in the Report on Corporate Governance.
| BOARD COMMITTEES
The Board has constituted six committees, viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders'' Relationship Committee, Risk Management Committee and Executive Committee. All the recommendations made by these Committees to the Board were accepted by the Board.
Details of committees, its composition, committee meetings held etc. are provided in the Report on Corporate Governance.
# RELATED PARTY TRANSACTIONS (RPTs)
AND POLICY
All RPTs entered into by the Company during the financial year were in accordance with the Company''s Policy on RPTs and in pursuance of approval granted by the Audit Committee. Pursuant to Regulation 23(3) of the Listing Regulations and Rule 6A of the Companies (Meetings of Board and its Powers) Rules, 2014, the Audit Committee granted omnibus approval to the transactions likely to be entered into by the Company with related parties during the year which are of repetitive nature. Members may refer to Note No. 53 to the Financial Statement which sets out RPT disclosures pursuant to IND AS-24.
All the RPTs effected in accordance with the approval are placed before the Audit Committee on a quarterly basis for review and noting. Material related party transactions were entered into by the Company only with its US subsidiary.
Apart from remuneration and sitting fees, there is no pecuniary transaction with any director, which had potential conflict of interest with the Company.
Detail of RPTs effected during the year are given in Form AOC-2 annexed as âAnnexure B" to this report in accordance with Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.
^ CORPORATE SOCIAL RESPONSIBILITY ("CSR")
Company believes that it can grow sustainably only through an ecosystem of interdependence with society. The Company considers its economic, environmental and social responsibility to foster sustainable local development as well as extend necessary support to the underprivileged and poor sections of the society.
Company has spent more than 2% of the average net profits during three preceding financial years. The Board had at its meeting held on 10 May 2022, approved the Annual Action Plan of CSR activities to be undertaken during the year in accordance with the CSR policy of the Company. CSR activities were carried out through various charitable trusts and NGOs who meet the criteria. CSR Committee reviewed and monitored the CSR projects and expenditure undertaken by the Company as per the plan and apprised the Board of the same.
Thrust areas for CSR spent were healthcare, education, rural development & promoting sports. On the healthcare front, contributions were made for healthcare camps, medical treatment for cancer and other diseases, setting up hospitals for affordable medical treatment, cataract surgeries, eradication of malnutrition etc. On the education front contributions were made for setting up colleges and educational infrastructure in underdeveloped regions, subsidised education for the underprivileged etc. As regards rural development & community welfare, contributions were made to old age homes, subsidised food for the needy, providing necessities to the physically challenged community etc.
Thrust areas for CSR were healthcare, education, rural development & promoting sports.
Chief Financial Officer has certified that the funds disbursed for CSR during the financial year 2023, have been used for the purpose and in the manner approved by the Board.
CSR policy and CSR activities undertaken during the year are annexed as âAnnexure C" to this report, in accordance with Sections 134 & 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Rule 9 of the Companies (Accounts) Rules, 2014.
¦ MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 read with Part B of Schedule V of the Listing Regulations, a detailed review of the business operations, performance, future outlook, major events occurred during the year as well as state of company''s affairs is given in the Management Discussion and Analysis, which forms part of this report.
^ REPORT ON CORPORATE GOVERNANCE
The Board of Directors reaffirm their continued commitment to good Corporate Governance & ethical practices. The Company is committed to maintain highest standard of Corporate Governance and elevating the same to the best global practices.
Report on Corporate Governance for the year under review, forms part of this report. A certificate from M/s. Alwyn D''Souza & Co., Practicing Company Secretaries confirming compliance with Corporate Governance norms as stipulated under the Listing Regulations, is annexed and forms part of this report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Company has been conducting business in a sustainable manner and to create maximum value for all its stakeholders.
The Company is also committed to ensure that its actions positively impact the economic, societal and environmental dimensions.
Business Responsibility and Sustainability Report (âBRSR") for FY 2023 in accordance with Regulation 34(2)
(f) of the Listing Regulations, forms part of this report.
It describes various initiatives taken by the Company from environment, social and governance perspective.
| ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return in Form MGT-7 as on 31 March 2023 is placed on the Company''s website at https://www.aiantapharma.com/aianta/Investors/annual_ results/?year=2022-23.
UNCLAIMED DIVIDEND/SHARES
In pursuance of Regulation 39 read with Schedule VI of the Listing Regulations, the details of shares lying in unclaimed suspense account and unclaimed shares/dividend transferred to Investor Education and Protection Fund, are provided in the Report on Corporate Governance.
^ AUDITORS AND AUDIT REPORTS O Statutory Auditors
M/s. B S R and Co. LLP, Chartered Accountants (ICAI Registration No.: 101248W/W-100022) (âBSR") are the Statutory Auditors of the Company. At the 43rd AGM held on 4 August 2022, Members re-appointed BSR for a further period of five years, i.e. from the conclusion of the 43rd AGM till the conclusion of the 48th AGM of the Company to be held in the year 2027
Auditors'' Report on the financial statements of the Company for the financial year ended 31 March 2023 is enclosed with the financial statements, which forms part of this Annual Report. The report is unmodified i.e. it does not contain any qualification, reservation, adverse remark or disclaimer. Notes on financial statement referred to in the Auditor''s Report are selfexplanatory and do not call for any further comments.
O Internal Auditors
M/s. Ernst & Young LLP conducted internal audit of important centralised functions. For other locations, viz. factories, C&F agents and warehouses, local Chartered Accountant Firms having requisite expertise and resources are appointed as Internal Auditors. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board in each meeting. No instances of fraud, suspected fraud, irregularity or failure of internal control systems of material nature were reported by the internal auditors during the year.
O Secretarial Auditors, Audit Report, Secretarial Compliance Certificate
Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 & Regulation 24A
the ensuing AGM. The proposal forms a part of the notice of the AGM.
During the year under review, the Statutory, Internal, Secretarial and Cost Auditors have not reported to the Audit Committee, any instances of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Directors'' report.
SECRETARIAL STANDARDS
During FY 2023, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India as amended.
INTERNAL CONTROL SYSTEM, RISK MANAGEMENT AND COMPLIANCE FRAMEWORK
The Company believes that internal controls are the prerequisite of governance and all the actions should be exercised within the framework of checks and balances.
It has laid down an adequate system of internal controls, policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, timely preparation of reliable financial disclosures and to ensure compliance with regulatory requirements. The Company has adopted Committee of Sponsoring Organisations (âCOSO") 2017 of the Treadway Commission framework for its Enterprise Risk Management processes.
The internal financial controls are adequate and operating effectively. Effectiveness of internal financial controls is ensured through management reviews, controlled self-assessment and independent testing by the internal audit team.
The Company also has Risk Management Policy and framework in place which defines roles and responsibilities at various levels of the risk management process.
Risk Management Committee (âRMC") oversees the implementation of Risk Management Policy as well as risk management and mitigation framework.
Risks are categorised into Regulatory, Competition,
Supply Chain Disruption, Cyber Security including Data Security, Economic & Political Environment, Environmental, Social & Governance Risks and other critical risks. The inhouse Internal audit team acts as Risk co-ordinator and engages with all functional all heads to identify internal and external events that may have an adverse impact on the achievement of Company''s objectives and periodically
of the Listing Regulations, Board had appointed M/s. Alwyn D''Souza & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company for year ended 31 March 2023.
Secretarial Audit Report is annexed to this report as âAnnexure D". There are no qualifications or reservations or adverse remarks in the Secretarial Audit Report. The report is self-explanatory and does not call for any further comments.
M/s. Alwyn D''Souza & Co., Practicing Company Secretaries, have also issued Secretarial Compliance Report for the year ended 31 March 2023 confirming that the Company has maintained proper records as stipulated under various Rules and Regulations applicable to the Company and that no action has been taken against the Company or its material subsidiaries or promoters/directors by SEBI/Stock Exchanges. The Company disseminates the Report on the websites of BSE and NSE within the prescribed time.
On the recommendations of the Audit Committee, Board of Directors have re-appointed M/s. Alwyn D''Souza & Co., Practicing Company Secretaries, to conduct the secretarial audit of the Company for FY 2024. They have consented and confirmed their eligibility for the said re-appointment.
The Company maintains cost accounts and records as per the provisions of Section 148(1) of the Act and the same are audited by the Cost Auditors. In accordance with Section 148(6) of the Act read with Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014, cost audit report, in Form No. CRA-4 (in XBRL mode), for the year ended 31 March 2022, was filed with the Ministry of Corporate Affairs, within the prescribed time.
Based on the recommendation of the Audit Committee, Board has appointed M/s. Sevekari,
Khare & Associates, practicing Cost Accountants, to audit the cost records of the Company for FY 2024. They have confirmed that their appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and that they are not disqualified to be appointed as the Cost Auditors of the Company for the year ending 31 March 2024.
In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration to be paid to the Cost Auditor for FY 2024 is required to be ratified by the members. Accordingly, the Board of Directors recommends the same for approval by members at
monitor changes in both internal and external environment leading to emergence of a new threat/risk.
Risk Management system followed by the Company is detailed in the Management Discussion and Analysis report and in the Notes to Accounts.
The Company has a comprehensive framework for monitoring compliances with applicable laws and internal policies. Business and corporate functions ensure implementation of laws at the primary level through checks and controls in their operational processes. Compliances are further mapped into the compliance monitoring tool and affirmed at regular frequency by the compliance owners and compliance reports are submitted to the Board on a quarterly basis.
A sustainable and seamless supply chain is critical for the timely availability of our medicines to our patients across the globe. Your Company has developed a resilient and agile supply chain framework that sources its direct and indirect materials from its suppliers. Company continuously supports supply chain and distribution partners to maintain an uninterrupted supply and distribution of medicines.
Company has requisite processes in place for sustainable sourcing and sustainability parameters are integrated into overall supply chain.
® VIGIL MECHANISM/WHISTLE-BLOWER POLICY
Company has zero tolerance for any form of unethical conduct or behaviour and it adheres to uncompromising integrity in conduct of its business. It has put in place vigil mechanism viz., Whistle-Blower Policy to encourage the employees who have knowledge of actual or suspected violation, malpractices, corruption, fraud or unethical conduct, leak of unpublished price sensitive information, genuine concerns, etc. The employees can come forward, seek resolution and express their legitimate concerns to the Audit Committee Chairman without any fear of reprimand, retaliation, victimisation or unfair treatment.
It is posted on the intranet and website of the Company and the same is available at https://ajantapharma.com// images/Whistle-Blower-Policy-Feb-2023.pdf.
The same is reviewed by the Audit Committee from time to time. No concerns or irregularities have been reported by employees/directors till date. It is affirmed that no person has been denied access to the Audit Committee.
⢠One-time settlement;
⢠Material changes and commitments affecting financial position of the Company between the end of the financial year and the date of this report;
⢠Significant or material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations;
⢠Application or proceedings made under the Indian Bankruptcy Code, 2016.
DIRECTORS'' RESPONSIBILITY STATEMENT
The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI.
To the best of their knowledge and belief and according to the information and explanations obtained by them and pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), your Directors confirm:
a) that in the preparation of the annual accounts for the year ended 31 March 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures,
if any;
b) that they had selected accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31 March 2023 and of the profit of the Company for the period;
POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
Company is dedicated in providing a safe, conducive and healthy working environment that enables its employees to work without fear of prejudice and gender bias. It is the continuous endeavour of the management to create and provide an environment that is free from discrimination and sexual harassment.
The Company has adopted Policy on prevention, prohibition and redressal of sexual harassment of women at workplaces in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Company conducts awareness sessions to sensitise employees about the policy.
It has a vigorous mechanism in place to redress complaints reported under it and has constituted an Internal Complaints Committee (âICC") at all the locations where there are more than 10 women employees, to address the complaints regarding sexual harassment.
During the year under review, no complaint of sexual harassment has been received.
CODE OF CONDUCT
The Company has laid down a robust Code of Conduct for Directors & Senior Management, which is based on the principles of ethics, integrity and transparency. Details of the Code are given in the Corporate Governance Report.
HUMAN RESOURCE, HEALTH & SAFETY
Human Resources are invaluable assets and Company is committed to provide conducive environment that values their contribution and provides them opportunities to grow. It invests in their training and professional development to equip them with the necessary skills, domain expertise and latest technology in line with the business strategy.
The Company is dedicated to the protection of human health, safety, environment and maintains highest standards of health and safety in all its plants and facilities. This commitment forms the basis for our EHS management systems and governance.
Company takes pride in stating that it has been recognised and certified as a "Great Place to Work" by Great Place to Work Institute.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
There were 7,713 permanent employees of the Company as of 31 March 2023. The information pursuant to Rule (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as âAnnexure E".
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this report pursuant to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
Pursuant to Section 134 of the Act read with Companies (Accounts) Rules, 2014, particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are disclosed in âAnnexure F".
^ LOANS, GUARANTEES & INVESTMENTS
Pursuant to Section 134(3)(g) of the Act, details of loans, guarantees and investments are disclosed in Notes to Financial Statements.
OTHER DISCLOSURES
No disclosure or reporting is made with respect to the following as there were no such transactions during the year under review:
⢠Transfer to Reserves;
⢠Deposits accepted by the Company;
⢠Issue of equity shares with differential rights as to dividend, voting or otherwise;
⢠Provision of money for the purchase of its own shares by employees or by trustee for the benefit of employees;
⢠Remuneration or commission received by Managing Director & CEO/Whole-Time Director from subsidiaries;
⢠Revision in the financial statements;
⢠Change in the nature of company''s business;
⢠Transfer of any amount to reserves;
⢠Suspension of Company''s securities;
⢠Failure to implement Corporate Action;
c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) that the annual accounts/financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
GRATITUDE & ACKNOWLEDGEMENTS
Your Directors place on record earnest appreciation for the contribution made by each and every Ajantaite during the year under review. Company''s consistent growth was made possible by their hard work, solidarity, cooperation and dedication. The Directors also wish to express their gratitude to the Investors for the confidence and faith that they continued to repose in the Company. Board takes this opportunity to thank all shareholders, analysts, business partners, government and regulatory authorities, financial institutions, banks, distributors, suppliers, business associates, medical professionals and customers for their continued guidance, encouragement and splendid support.
For and on Behalf of the Board of Directors
Mannalal B. Agrawal
Chairman
Mumbai, 5 May 2023
Mar 31, 2022
Your Directors are pleased to present their Forty-Third Annual Report and Audited Financial Statements for the Year ended 31 March 2022.
Ml}
|
('' in cr. except EPS) |
||||
|
Particulars |
Consolidated |
Standalone |
||
|
Year ended 31 March |
2022 |
2021 |
2022 |
2021 |
|
Revenue from operations |
3,341 |
2,890 |
3,141 |
2,719 |
|
Other Income |
116 |
26 |
140 |
104 |
|
Profit before Depreciation, Finance Costs and Tax expense |
1,045 |
1,025 |
1,031 |
1,020 |
|
Profit after Tax |
713 |
654 |
720 |
676 |
|
Total Comprehensive Income |
705 |
647 |
720 |
674 |
|
Earning Per Share (EPS) (?) (Basic) |
82.45 |
75.09 |
83.28 |
77.59 |
The Financial Statements for the year ended 31 March 2022 have been prepared in accordance with the Indian Accounting Standards (Ind AS) read with Section 133 and other applicable provisions of the Companies Act, 2013 ("Act").
The Company discloses consolidated and standalone financial results on a quarterly basis, which are subjected to limited review, and publishes consolidated and standalone audited financial results annually.
y?
The Company continues to be engaged in development, manufacture and sale of branded and generic pharmaceutical formulations.
During the year under review, Consolidated Revenue from Operations increased to '' 3,341 cr., around 16% higher than the previous year. Consolidated Profit After Tax grew at 9% from '' 654 cr. to '' 713 cr. Exports contributed around 70% of the business.
lif1
L_ w DIVIDEND
At the meeting held on 29 October 2021, the Board had declared an interim dividend of '' 9.50/- (475%) per equity share in accordance with the Dividend Distribution Policy of the Company. Total dividend payout was '' 82.21 cr. In order to conserve resources for business operations, the Board recommends interim dividend to be considered as final dividend for FY 2022. The Dividend Distribution Policy is placed on the website of the Company and can be accessed at http://www.ajantapharma.com/AdminData/PolicyCodes/ DividendPolicy.pdf
jpip subsidiaries, associates and joint L_ ventures
The Company continues to have five overseas subsidiaries, including one step down subsidiary. The Company does not have any Associate company or Joint Venture.
During the year, Ajanta Pharma Mauritius Limited (APML) closed down its manufacturing unit after following due process and complying with regulatory requirements. The manufacturing facility was about 25-year-old and needed upgrade involving major capex, which was commercially unviable. The Company has sufficient manufacturing capacity in India and all the supplies of erstwhile Mauritius facility would be catered from India. APML will continue to operate with trading activities. APMLâs subsidiary Ajanta Pharma Mauritius (International) Limited located in the Free Trade Port is being wound up as it lost its relevance due to rationalisation of tax structure in Mauritius.
All the subsidiaries except Ajanta Pharma Nigeria Limited and Ajanta Pharma Mauritius (International) Ltd. have contributed positively in the growth and profitability of the Company. Financials of subsidiaries are included in the consolidated financial statements, which forms part of this Annual Report. Statement containing salient features of financials of subsidiaries pursuant to Section 129 of the Act read with Rule 5 and 8(1) of the Companies (Accounts) Rules, 2014, is annexed in the Form AOC-1 as "Annexure A" to this Report.
Audited Financial Statements of Companyâs subsidiaries are available on Companyâs website at www.ajantapharma.com and the same are available for inspection at the Registered Office of the Company. The same will also be made available to interested members upon getting request.
Companyâs"PolicyonMaterialSubsidiaries"canbeaccessedat
http://www.Aiantapharma.com/AdminData/PolicyCodes/
PolicyonMaterialSubsidiaries2019.pdf
L_ consolidated financial statements
In accordance with the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Annual Audited Consolidated Financial Statements for the financial year ended 31 March 2022, together with Report of Auditorsâ thereon, forms part of this annual report.
I ????
L_ credit rating
The Companyâs bank facilities are rated by Credit Analysis and Research Limited ("CARE"). They have assigned rating CARE AA / CARE A1 for long term / short term bank facilities, which reaffirms the reputation and trust the Company has earned for its sound financial management and its ability to meet its financial obligations.
L_ share capital
The Companyâs bank facilities are rated by Credit Analysis and Research Limited ("CARE"). They have assigned rating CARE AA / CARE A1 for long term / short term bank facilities, which reaffirms the reputation and trust the Company has earned for its sound financial management and its ability to meet its financial obligations.
? Buy-back of shares
During the year, the Company bought back 11,20,000 (Eleven lakhs twenty thousand only) fully paid-up equity shares of the face value of '' 2/- each, representing 1.29% of the total number of equity shares in the subscribed and paid-up equity share capital of the Company, from the existing shareholders / beneficial owners of equity shares of the Company on a proportionate basis, through "Tender Offer" route, at a price of '' 2,550/- (Rupees Two thousand five hundred and fifty only) per equity share for an aggregate amount of '' 285.60 cr.
Post Buyback, the paid-up share capital stood reduced from 8,65,35,770 equity shares to 8,54,15,770 equity shares of '' 2/- each. Post buyback shareholding pattern is given in the Corporate Governance Report.
? Employee Stock Option Scheme
The Company has formulated and implemented Employee Stock Option Scheme, 2011 ("ESOS 2011") and Ajanta Pharma Share Based Incentive Plan 2019 ("SBIP 2019"). The Nomination and Remuneration Committee ("NRC") administers these schemes. There were no changes in the schemes during the year.
During the year, 4,000 shares were issued and allotted against the options exercised. Disclosures with regard to Employeesâ Stock Options Scheme are put up on the Companyâs website and can be accessed at http:// www.ajantapharma.com/AnnualReports.aspx
M/s. Alwyn Dsouza & Co., Secretarial Auditor have issued certificate confirming that ESOS 2011 & SBIP 2019 have been implemented in accordance with SEBI regulations and the resolution passed by members in their general meeting. The certificate will be available for inspection by members at the ensuing Annual General Meeting ("AGM").
DIRECTORS AND KEY MANAGERIAL L_ PERSONNEL
Board of Directors of the Company comprise of eminent persons of proven competence and integrity. They bring in diversified knowledge & experience, strong financial & business acumen, management & leadership qualities.
Mr. Mannalal B. Agrawal retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The Board recommends his reappointment.
All the Independent Directors have given declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and under the Listing Regulations. They have registered their names in the Independent Directors data-base and have passed the proficiency test, if applicable. They have also affirmed compliance to the Conduct for Independent Directors.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of manufacturing,
operations, finance, people management, strategy, sales & marketing, auditing, banking, risk management and they hold high standards of integrity.
Based on disclosures provided by them, none of them are disqualified from being appointed as Director under Section 164 of the Act and are independent from the management.
? Policies on appointment and remuneration of directors
The Company has laid down "Policy for Determining Qualifications of Directors" and "Policy for Remuneration of Directors and Employees" as approved by the NRC. The policies are available at:
? http://www.ajantapharma. com/AdminData/PolicvCodes/ PolicvfordeterminingqualificationsofDirectors.pdf
? http://www.ajantapharma.com/AdminData/ PolicyCodes/Policyforremuneration2fil8.pdf
The Policy for Determining Qualifications of Directors sets out guiding principles for selection of persons who are qualified to become Directors/ Independent Directors.
The objective of the Policy for Remuneration of Directors and Employees is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, Key Managerial Personnel ("KMP") and Senior Management employees. The same are briefly mentioned in the Corporate Governance Report.
Mr. Yogesh M. Agrawal, Managing Director; Mr. Rajesh M. Agrawal, Joint Managing Director; Mr. Arvind K. Agrawal, Chief Financial Officer and Mr. Gaurang C. Shah, Company Secretary are the KMP of the Company as on the date of this report.
? Board and directors'' evaluation
As per provisions of the Act and Regulation 17(10) of the Listing Regulations, the evaluation process for the performance of the Board, its committees and individual Directors was carried out by Board of Directors, in accordance with the framework and criteria laid down by the NRC.
Further, at a separate meeting, the Independent Directors evaluated performance of Non-Independent
Directors, Board as a whole and of the Chairman of the Board.
A consolidated report on performance evaluation was shared with the Chairman of the Board for his review and discussion with Board and each Director.
The manner of evaluation of Board of Directors performance and matters incidental thereto, are detailed in the Report on Corporate Governance.
During the year, 5 Board meetings were held through videoconferencing due to on-going threat of COVID-19. Details of meetings are given in the Report on Corporate Governance. Measures were taken to ensure security of information and confidentiality of process, at the same time, ensuring convenience of the Board members.
The Board currently has six committees, viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Risk Management Committee and Executive Committee. All the recommendations made by these Committees of Board including the Audit Committee were accepted by the Board.
A detailed update on the committees, its composition, number of Committee meetings held and attendance of the directors at each meeting is provided in the Report on Corporate Governance.
RELATED PARTY TRANSACTIONS AND L_ POLICY
All the Related Party transactions ("RPTs") entered into during the financial year were in accordance with the Companyâs Policy on Related Party Transactions, on an armâs length basis and in the ordinary course of business.
Pursuant to Regulation 23(3) of the Listing Regulations and Rule 6A of the Companies (Meetings of Board and its Powers) Rules, 2014, the Audit Committee granted omnibus approval to the transactions likely to be entered into by the Company with related parties during the year and are of repetitive nature. A statement of all the RPTs effected is presented before the Audit Committee on a quarterly basis. Members may refer to Note No. 53 to the Financial Statement which sets out related party disclosures pursuant to IND AS-24.
During the year, the Company had not entered into any transactions with related parties (save and except transactions with companyâs subsidiaries), which could be considered as material in accordance with the Companyâs Policy on materiality of RPT or which are required to be reported in Form AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
L_ CORPORATE SOCIAL RESPONSIBILITY ("CSR")
The CSR Committee reviews and monitors the CSR projects and expenditure undertaken by the Company on a regular basis and apprises the Board of the same.
Company has spent over 2% of the average net profits during the three preceding financial years in accordance with the CSR Policy and Annual Action Plan of the Company. CSR activities were carried out in the field of healthcare and education for the under privileged people. Company also contributed significantly in collaboration with credible NGOs across various states for providing relief to the communities impacted by COVID-19 such as conducting of vaccination drive, distributing essential groceries to the needy, providing medical equipment and PPEs.
Further, in terms of the amended CSR Rules, the Chief Financial Officer has certified that the funds disbursed for CSR have been used for the purpose and in the manner approved by the Board for the financial year 2022.
CSR policy and report on CSR activities undertaken during the year in accordance with Section 134 & 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Rule 9 of the Companies (Accounts) Rules, 2014, is annexed as "Annexure B" to this report.
L_ MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook, major events occurred during the year as well as state of companyâs affairs is given in the Management Discussion and Analysis, which forms part of this report.
i®1
L_ REPORT ON CORPORATE GOVERNANCE
The Board of Directors reaffirm their continued commitment to good Corporate Governance practices and elevating the same.
Report on Corporate Governance together with certificate from the Practicing Company Secretaries confirming compliance of conditions of Corporate Governance, is annexed and forms an integral part of this report.
Hi ^ BUSINESS RESPONSIBILITY AND L_ SUSTAINABILITY REPORT
Company believes in creating value for all its stakeholders. It has been conducting business in a sustainable manner and in a way that delivers long-term shareholder value and create maximum value for the Society.
The Company is also committed to ensure that its actions positively impact the economic, societal and environmental dimensions of the triple bottom line.
The Company has on voluntary basis adopted Business Responsibility and Sustainability Report ("BRSR") for FY 2022 based on the National Voluntary Guidelines on Social, Environmental and Economic responsibilities of business, to demonstrate sustainability objectives and companyâs performance on ESG parameters. The said report forms part of the Annual Report and the same have been hosted on the Companyâs website, which can be accessed at http://www. ajantapharma.com/AnnualReports.aspx.
Any Member interested in obtaining a copy of BRSR may write to the Company Secretary.
I
L_ UNCLAIMED DIVIDEND / SHARES
In pursuance of Regulation 39 read with Schedule VI of the Listing Regulations, the details of shares lying in unclaimed suspense account and unclaimed shares / dividend transferred to Investor Education and Protection Fund, are provided in the Report on Corporate Governance.
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on 31 March 2022 is available on the Companyâs website at http://www.aiantapharma.com/ AnnualReports.aspx.
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on 31 March 2022 is available on the Companyâs website at
The Auditorsâ Report on the financial statements of the Company for the financial year ended 31 March 2022 is unmodified i.e. it does not contain any qualification, reservation, adverse remark or disclaimer. The Notes on financial statement referred to in the Auditorâs Report are self-explanatory and do not call for any further comments. The Auditorsâ Report is enclosed with the financial statements forming part of the Annual Report. M/s. B S R and Co. LLP, Chartered Accountants (ICAI Registration No.: 101248W/W-100022) ("M/s. BSRâ) are the Statutory Auditors of the Company. Their tenure expires at the conclusion of ensuing 43rd AGM of the Company.
M/s. BSR was established in the year 1990 and is a Limited Liability Partnership Firm registered with the Institute of Chartered Accountants of India ("ICAIâ). Their registered office is in Mumbai and have 12 branch offices in various cities in India. It is primarily engaged in providing audit and assurance services to its clients. Based on the recommendation of the Audit Committee, the Board of Directors of the Company at its meeting held on 10 May 2022, have subject to approval of members, re-appointed M/s. BSR as the Statutory Auditor of the Company for a period of five years, i.e., to hold office from the conclusion of the 43rd AGM till the conclusion of the 48th AGM to be held in the year 2027. Proposal for their re-appointment is placed in the Notice convening the 43rd AGM, which forms part of this report. M/s. BSR have confirmed their independent status and eligibility for the said appointment. The Company has received confirmation from them to the effect that their appointment, if made, will be in accordance with the limits specified under the Act and that the firm satisfies the criteria specified in Section 141 of the Act read with Rule 4 of Companies (Audit & Auditors) Rules, 2014. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI. The Board is of the opinion that continuation of M/s. BSR, as Statutory Auditors will be in the best interests of the Company and recommends to the members to consider their re-appointment as Statutory Auditors of the Company, for another term of five years, from the conclusion of the ensuing AGM, till the AGM to be held in the calendar year 2027, at such remuneration mutually agreed and approved by the Board.
M/s. Ernst & Young LLP conducted internal audit of important centralised functions. For other locations, viz. factories, C&F agents and warehouses, other Chartered
Accounting Firms having requisite expertise and resources are appointed as Internal Auditors. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
Pursuant to provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, Board had appointed M/s. Alwyn Dâsouza & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company. Secretarial Audit Report is annexed to this report as "Annexure C". There are no qualifications or reservations or adverse remarks in the Secretarial Audit Report. The Secretarial Audit Report is self-explanatory and does not call for any further comments.
The Company maintains cost accounts and records as per the provisions of Section 148(1) of the Act and the same are audited by the Cost Auditors. Cost Audit Report for FY 2021 has been filed with the Ministry of Corporate Affairs.
Based on the recommendation of the Audit Committee, Board has appointed M/s. Sevekari, Khare & Associates, practicing Cost Accountants, to audit the cost records of the Company for FY 2023. They have confirmed that their appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and that they are not disqualified to be appointed as the Cost Auditors of the Company for the year ending 31 March 2023.
Resolution for ratification of remuneration of the Cost Auditors by the Members has been set out in the Notice of the 43rd AGM.
During the year under review, the statutory auditors, internal auditors, secretarial auditors and cost auditors have not reported any instances of fraud committed in the Company.
ANNUAL SECRETARIAL COMPLIANCE REPORT
M/s. Alwyn DâSouza & Co., Practicing Company Secretaries, have issued Secretarial Compliance Report for the year ended 31 March 2022 confirming compliance of SEBI Regulations / guidelines / circulars issued thereunder and applicable to the Company. There are no observations or adverse remarks in their report.
During FY 2022, the Company has complied with all applicable mandatory Secretarial Standards issued by The Institute of Company Secretaries of India.
management and compliance L_ framework
The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. It helps to identify, assess and leverage business opportunities and manage risks effectively. The Internal Financial Controls ("IFCs") are commensurate with the scale and complexity of its operations. The controls were tested during the year and no reportable material weaknesses either in their design or operations were observed. The current system of IFCs is aligned with the requirement of the Act and is in line with globally accepted risk-based framework.
The Company has put in place robust policies and procedures, which inter-alia, ensure integrity in conducting its business, safeguarding its assets, timely preparation of reliable financial information, accuracy & completeness in maintaining accounting records and prevention & detection of frauds & errors.
The Company also has Risk Management framework in place which defines roles and responsibilities at various levels of the risk management process.
Board has set up Risk Management Committee ("RMC") as per details set out in the Report on Corporate Governance. Audit Committee and RMC reviews key risk elements of the Companyâs business, finance, operations & compliance and its mitigation strategies. RMC reviews key strategic, business, compliance and operational risks; whereas issues around ethics and fraud, internal control over financial reporting, process risks and their mitigation, are reviewed by the Audit Committee. Risk Management system followed by the Company is detailed in the Management Discussion and Analysis report and in the Notes of Accounts.
L_ ^ supply CHAIN
Your Company developed a resilient supply chain that supported business growth despite adversities caused by the second wave of COVID-19. Staying agile, it continued sourcing raw materials from over approximately 2,550 suppliers, while ensuring the safety of its partners and customers.
Further, quality, safety and compliance continued to remain the backbone of supply chain operations team.
VIGIL MECHANISM / WHISTLE BLOWER L_ POLICY
Company has zero tolerance policy for any form of unethical behavior. The Company has formulated vigil mechanism viz., Whistle Blower Policy to encourage the company employees who have knowledge of actual or suspected violation, malpractices, corruption, fraud or unethical conduct, leak of unpublished price sensitive information, etc. The employees can come forward and express their legitimate concerns to the Audit Committee Chairman without any fear of reprimand, victimisation or unfair treatment.
It is posted on the intranet and website of your Company and the same is available at http://www.aiantapharma.com/ AdminData/PolicyCodes/WhistleBlowerPolicy2019.pdf The same is reviewed by the Audit Committee from time to time. No concerns or irregularities have been reported by employees / directors till date. It is affirmed that no person has been denied access to the Audit Committee.
~^ POLICY ON SEXUAL HARASSMENT OF
L_ women at work place
The Company is committed to creating a healthy working environment that enables employees to work without fear of prejudice and gender bias. The Company has formulated Policy on prevention, prohibition and redressal of sexual harassment of women at workplaces in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. Your Company has a robust mechanism in place to redress complaints reported under it if any. Company has been imparting training programmes on periodic basis to familiarise women employees about the policy. Policy is available on intranet of the Company. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the Internal Complaints Committees (ICC), whilst dealing with issues related to sexual harassment at the work place. The Company has set up ICC at all the locations where there are more than 10 women employees, to address the complaints regarding sexual harassment. Company has not received any complaints during the year.
sf1
code of conduct
The Company has laid down a robust Code of Business Conduct and Ethics, which is based on the principles of
ethics, integrity and transparency. More details about the Code are given in the Corporate Governance Report.
l_ human resource, health & safety
The Company takes pride in its human capital, which comprises people from diverse backgrounds and cultures. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront.
Ajantaites have unflinching commitment and ensure that despite the challenges, the highly efficacious medicines manufactured by the Company were made available across the world.
The Company gives paramount importance to safety, security and well-being of its human resources and maintains highest standards of health and safety in all its plants and facilities.
managerial remuneration and l_ particulars OF EMPLOYEES
There were 7,234 permanent employees of the Company as of 31 March 2022. The information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as "Annexure D".
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this report pursuant to proviso to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company.
tâ\ conservation OF ENERGY, TEcHNOLOGY ABSORPTION, FOREIGN ExcHANGE EARNINGS AND OuTGO
Pursuant to Section 134 of the Act read with Companies (Accounts) Rules, 2014, particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are given in "Annexure E" to this report.
p
L_ LOANS, GuARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments, pursuant to provisions of Section 186 of the Act and Schedule V of the Listing Regulations, are given in Notes to Financial Statements.
No disclosure or reporting is made with respect to the following items, as there were no such transactions during the year under review:
? Details relating to deposits accepted by the Company;
? The issue of equity shares with differential rights as to dividend, voting or otherwise;
? Provision of money for the purchase of its own shares by employees or by trustees for the benefits of employees;
? Remuneration or commission received by Managing Director & CEO from subsidiaries;
? Revision in the financial statements;
? Change in the nature of companyâs business;
? Transfer of any amount to reserves during the year under review;
? Material changes and commitments affecting financial position of the Company between the end of the financial year and the date of this report.
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l_T10 DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm:
a. that in the preparation of the annual accounts for the year ended 31 March 2022, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;
b. that the Directors had selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31 March 2022 and of the profit of the Company for the period;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the annual accounts/financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
L_ GRATITUDE & ACKNOWLEDGEMENTS
Your Directors place on record, their sincere appreciation for the commitment, dedication, hard work and wholehearted efforts put in by each and every Ajantaite during the challenging times. The Directors also wish to express their gratitude to the Investors for the confidence and faith that they continued to repose in the Company. They also acknowledge the guidance, encouragement and cooperation received by it from various departments of the Governments & other statutory bodies, financial institutions, banks, distributors, suppliers, business associates, analysts, medical professionals and customers.
For and on Behalf of the Board of Directors,
Chairman
Mumbai, 10 May 2022
Mar 31, 2019
Dear Shareholders,
The Directors present their Fortieth Annual Report and Audited Financial Statements for the Year ended 31st March 2019.
1. Financial performance
(Rs. in cr. except EPS)
|
Particulars |
Standalone |
Consolidated |
||
|
Year ended 31st March |
2019 |
2018 |
2019 |
2018 |
|
Revenue from operations |
1,773 |
1,830 |
2,055 |
2,131 |
|
Other Income |
102 |
73 |
21 |
24 |
|
Profit/Loss before Depreciation, Finance Costs and Tax expenses |
583 |
620 |
588 |
683 |
|
Profit after Tax |
392 |
428 |
387 |
469 |
|
Total Comprehensive Income |
390 |
426 |
384 |
472 |
|
Earning Per Share (EPS) (?) (Basic) |
44.51 |
48.59 |
43.97 |
53.26 |
2. Performance Review
Company continues to operate only in one segment i.e. pharmaceuticals and there is no change in the nature of business of the company.
Revenue from operations has seen marginal decline, mainly on account of reduced anti-malaria institution business, which was partially compensated by other markets. Operating cost of 2 new manufacturing facilities at Dahej & Guwahati impacted the EBIDTA margins. Dahej plant is in the process of product registrations in different markets and Guwahati plant had been stabilizing the production line. Major events occurred during the year and state of company''s affairs has been discussed in the Management Discussion and Analysis Report which forms part of this report.
3. Dividend
After considering the company''s dividend distribution policy, the Board had declared and paid interim dividend of Rs. 9/- (450%) per equity share of the face value of Rs. 2/each. Total dividend payout was Rs. 79.22 cr. An amount of Rs. 37 Lakhs has been paid as dividend distribution tax on the interim dividend. Board recommends interim dividend to be considered as final.
The Dividend Distribution Policy is placed on the website of the company and its weblink ishttp:// www.ajantapharma.com/AdminData/PolicyCodes/ DividendPolicy.pdf
4. Transfer to Reserves
The Company proposes to keep the entire retained earnings in Profit & Loss account.
5. Subsidiaries, Associates and Joint Ventures
During the year, company''s wholly owned subsidiary viz., Ajanta Pharma UK Limited was dissolved on 18th December 2018.
Post that, the company has five operating subsidiaries overseas, including one step down subsidiary. Financials of subsidiaries are disclosed in the consolidated financial statements which forms part of this Annual Report. The Company does not have any Associate company or Joint Venture.
All the subsidiaries have contributed positively in the growth and profitability of the company. The performance of subsidiaries in Philippines and USA had been outstanding with continued growth in sales and profits. US performance was driven by new launches during the year. Mauritius subsidiaries performance was little lower than previous year, but was part of a conscious strategy of realignment of inventory levels in Africa. Performance of our subsidiary in Nigeria was on expected lines as major business has now been routed through the local distributor directly.
There have been no material change in the nature of business of subsidiaries.
Statement containing salient features of financial statements of subsidiaries pursuant to section 129 of the Companies Act, 2013 ("Act") read with Rule 5 of the Companies (Accounts) Rules, 2014 is annexed to this Report in the prescribed Form AOC-1, as "Annexure A".
The Audited Financial Statements of Company''s subsidiaries are available on the Company''s website at www.ajantapharma.com and the same are also available for inspection at the Registered Office of the Company as per the details mentioned in notice of the 40th Annual General Meeting. Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same.
The Company has laid down policy on material subsidiaries and placed on the website of the Company and its weblink ishttp://www. ajantapharma.com/AdminData/PolicyCodes/ PolicyonMaterialSubsidiaries2019.pdf
6. Consolidated Financial Statements
The Annual Audited Consolidated Financial Statements together with the Report of Auditors'' thereon forms part of this annual report.
7. Share capital
7.1. Buyback of equity shares
With an objective to enhance long term shareholder value and improve the Company''s return on equity, in March 2019, the Company bought back 7,69,230 (Seven lakhs sixty-nine thousand two hundred and thirty only) fully paid-up equity shares of the face value of Rs. 2/- each, representing 0.87% of the total number of equity shares in the subscribed and paid-up equity share capital of the Company, from the existing shareholders / beneficial owners of equity shares of the Company on a proportionate basis, through "Tender Offer" route at a price of Rs. 1,300/-(Rupees One thousand three hundred only) per equity share for an aggregate amount of Rs. 100 cr. only. Post Buyback, the paid-up share capital has reduced from 8,80,23,000 to 8,72,53,770 equity shares of Rs. 2/- each. Details of the shareholding pattern post buyback is given in the Corporate Governance Report.
7.2. Employee Stock Option Scheme
During the year, 8,500 shares were issued against the options exercised and 7,000 new options were granted under the Company''s ESOP scheme, ESOS - 2011. Disclosures with regard to Employees'' Stock Options Scheme are put up on the Company''s website and can be accessed athttp://www.ajantapharma.com/ AnnualReports.aspx
8. New projects & CAPEX
Company proactively builds infrastructure for meeting its growing needs in manufacturing, R&D, office space, etc. Currently the work on third phase of Guwahati plant is at an advanced stage of completion, which will be operational during FY 2020. Further, another manufacturing facility is being setup in Pithampur
SEZ, District Dhar, Madhya Pradesh, which will also be operational by FY 2020. During the year, an amount of Rs. 355 cr. was incurred on Capex.
9. Directors and Key Managerial Personnel
9.1. Cessation
During the year, Mr. Purushottam B. Agrawal relinquished his directorship w.e.f. 11th August 2018. Further, Dr. Anil Kumar resigned as Director of the Company w.e.f. 3rd April 2019.
The Board places on record its appreciation for the valuable contribution made by Mr. Purushottam B. Agrawal since company''s inception and for the services rendered by Dr. Anil Kumar during his long association with the Company. There were no other changes in Directors and Key Managerial Personnel during the year.
9.2. Appointment
Mr. Chandrakant Khetan, Mr. K H. Viswanathan, Mr. Prabhakar Dalal and Dr. Anjana Grewal were appointed as Independent Directors at the 35th Annual General Meeting held on 5th August 2014 for a period of five years and accordingly they hold office upto the ensuing Annual General Meeting. Considering their knowledge, experience and skillset in respective fields as also significant contribution made by them during last five years, the Board has on the recommendations of the Nomination and Remuneration Committee and subject to approval of members at the ensuing Annual General Meeting, re-appointed them as Independent Directors for another term of 5 years, not liable to retire by rotation.
Mr. Chandrakant Khetan, Mr. K H. Viswanathan, Mr. Prabhakar Dalal and Dr. Anjana Grewal have given declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and Rules made thereunder and under the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 ("Listing Regulations"). Based on disclosures provided by these Directors, none of them are disqualified from being appointed as Directors under section 164 of the Act and are independent from the management.
In terms of Section 160 (1) of the Companies Act, 2013, the Company has received notice in writing from member signifying his intention to propose the candidature for the re-appointment of Mr. Chandrakant Khetan, Mr. K H. Viswanathan, Mr. Prabhakar Dalal and Dr. Anjana Grewal as Indepen dent Directors at the ensuing Annual General Meeting for another term of 5 years.
Resolutions for aforementioned re-appointments alongwith brief profile of the directors proposed to be re-appointed, form part of the Notice of the 40th AGM and respective resolutions are recommended for your approval.
Independent Directors are compliant with the Code of Independant Directors as per schedule IV of the Act.
9.3. Retirement by rotation
Mr. Madhusudan B. Agrawal and Mr. Rajesh M. Agrawal, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.
9.4. Policy on appointment and remuneration of Directors
The Nomination and Remuneration committee of directors has approved a policy for the selection, appointment and remuneration of directors. Criteria for appointment of Directors (http://www. ajantapharma.com/AdminData/PolicyCodes/ PolicyfordeterminingqualificationsofDirectors. pdf) and policy on remuneration of Directors (http://www.ajantapharma.com/AdminData/ PolicyCodes/Policyforremuneration2018.pdf) is given in the Corporate Governance Report.
9.5. Key Managerial Personnel
Mr. Yogesh M. Agrawal, Managing Director (DIN: 00073673), Mr. Rajesh M. Agrawal, Joint Managing Director (DIN: 00302467), Mr. Arvind Agrawal, Chief Financial Officer (DIN: 00648589) and Mr. Gaurang Shah, Company Secretary (FCS No.: 6696) are the Key Managerial Personnel of the Company as on the date of this Report.
9.6. Independent Director''s familiarisation programme
Company continued to familiarise Independent directors with business operations, important functions and other critical aspects to enable them to contribute on full informed basis and discharge their responsibilities effectively. During the year, the Independent Directors were familiarised with following aspects/operations:
i. Advancement and initiatives on Information Technology;
ii. Business operations in India & emerging markets;
iii. Business in emerging markets;
iv. Manufacturing operations;
v. Quality control.
Details of familiarisation programme imparted is placed on the company''s website and its weblink ishttp://www.ajantapharma.com/ AdminData/DirectorFamiliarizationProgram/ Directorsfamilarisationprogramme2019.pdf
9.7. Evaluation of Board''s performance
Pursuant to the provisions of the Act and the Listing Regulations, the evaluation of performance of the Board, individual directors and Board committees for the year 2018 was carried out by the Board as suggested by the Nomination and Remuneration Committee. Further, Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board. Board of Directors were satisfied with the evaluation process.
Manner in which the evaluation has been carried out and matters incidental thereto, have been detailed in the Corporate Governance Report, which forms part of this report.
10. Board meetings
During the year, four Board meetings were held, details of which are given in the Corporate Governance Report.
11. Board Committees
Details of composition of various Board Committees and matters incidental thereto are provided in the Corporate Governance Report.
12. Related Party Transactions and Policy
All the Related Party transactions (RPTs) affected during the financial year were on an arm''s length basis and in the ordinary course of business and the same were undertaken after taking approval of the Audit Committee. Omnibus approval of Audit Committee was obtained for all the transactions which are of repetitive nature. All the RPTs affected during the year are disclosed in the notes to Financial Statements.
Except to the extent of the shares held in the Company and the remuneration paid, if any, there were no materially significant related party transactions made by the company with promoters, directors or key managerial personnel which may have a potential conflict with the interest of the company at large or which warrants approval of the shareholders, drawn from the Company.
The Board has approved and adopted Policy on Related Party Transactions and the same is uploaded on the Company''s website and its weblink ishttp://www.ajantapharma.com/AdminData/ PolicyCodes/PolicyonRelatedPartyTransactions2019.pdf
Since all the transactions with related parties were in the ordinary course of business and at arm''s length, and there were no material related party transactions, the statement Form AOC-2, is not annexed to this report.
13. Corporate Social Responsibility (CSR)
Company continues to contribute on CSR front with thrust areas of Healthcare, Education & Community welfare, in accordance with company''s CSR policy.
During the year, Company continued several initiatives under the CSR program, directly as well as through agencies permitted under the Act. These included cataract surgery camps, family welfare camps, educational initiatives at schools etc. benefitting thousands of underprivileged population in the rural & tribal areas.
Details of CSR policy and CSR activities undertaken during the year in accordance with Section 134 & 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 and Rule 9 of the Companies (Accounts) Rules 2014, is annexed to this report as "Annexure B".
14. Management Discussion and Analysis
A detailed review of the operations, performance and future outlook is given in the Management Discussion and Analysis, which forms part of this Report.
15. Report on Corporate Governance
Report on Corporate Governance is annexed and forms an integral part of this Annual Report together with certificate from the Practicing Company Secretary regarding compliance of conditions of Report on Corporate Governance.
16. Business Responsibility Report
Business Responsibility Report for FY 2019, forms part of the Annual Report and as a Green Initiative the same has been hosted on the Company''s website, which can be accessed athttp://www. ajantapharma.com/AnnualReports.aspx Any Member interested in obtaining a copy of BRR may write to the Company Secretary.
17. Credit Rating
The Company''s bank facilities are rated by Credit Analysis and Research Limited (CARE). They have assigned rating Care A1 for working capital facilities and Care AA for long term borrowings, which indicates very strong/high degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
18. Extract of the Annual Return
In pursuance of Section 92(3) of the Act, and Rule 12(1) of the Companies (Management & Administration) Rules, 2014, extracts of Annual Return in Form MGT.9 is annexed to this Report as "Annexure C". The same is available athttp://www.ajantapharma.com/ AnnualReports.aspx
19. Auditors and Audit reports
19.1. Statutory Auditors
At the 38th Annual General Meeting held on 5th July 2017, the shareholders had approved the appointment of B S R & Co. LLP., Chartered Accountants (ICAI Firm''s Registration No. 101248W/W-100022) as the Statutory Auditors for a period of 5 years commencing from the conclusion of the 38th Annual General Meeting until the conclusion of 43rd Annual General Meeting, subject to ratification by the shareholders every year.
Pursuant to the recent amendment to Section 139 of the Act effective 7th May 2018, ratification by Shareholders every year for the appointment of the Statutory Auditors is no longer required and accordingly, the notice of ensuing Annual General Meeting does not include the proposal for seeking shareholders'' approval for ratification of Statutory Auditors appointment. In terms of the Listing Regulations, the auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.
Auditor''s Report for the year under review forms part of this annual report and does not contain any qualifications, reservations or adverse remarks.
19.2. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, Board had appointed M/s. Alwyn Dsouza & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. Their Secretarial Audit Report is annexed to this report as "Annexure D". There are no qualifications, reservation or adverse remark in the report.
19.3 Cost Auditors
Board has appointed M/s. Sevekari, Khare & Associates, Practicing Cost Accountants to audit the cost records of the Company for the financial year 2019-20. Their remuneration is subject to ratification by shareholders at the ensuing Annual General Meeting. Accordingly, resolution seeking members'' ratification of their remuneration, forms part of the Notice convening the 40th Annual General Meeting.
Cost Audit Report for the FY 2018 has been filed with the Ministry of Corporate Affairs on 24th August 2018.
The company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Act and accordingly such accounts and records are made and maintained.
During the year under review, the statutory auditors, secretarial auditors and cost auditors have not reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.
20. Internal Control System, Risk Management and Compliance Framework
The Company believes that a strong internal control framework is very much essential and is part of good corporate governance practices. Company has in place well defined and adequate internal financial control framework commensurate with the size and complexity of its business. During the year, such controls were tested and no material weakness in their design of operations were observed. The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. There are no risks identified which may threaten existence of the company. Risk Management system followed by the Company is detailed in the Management Discussion and Analysis report.
21. Vigil Mechanism/Whistle Blower policy
Company has set up vigil mechanism viz. Whistle Blower Policy to enable the employees and Directors to report to the Audit Committee Chairman, genuine concerns, unethical behavior and irregularities, if any, noticed by them in the Company, which could adversely affect company''s operations. It is posted on the intranet and website of the Company and the same is available at http://www.ajantapharma.com/AdminData/PolicyCodes/WhistleBlowerPolicy2019.pdf The policy is reviewed by the Audit Committee from time to time. No concerns or irregularities have been reported by employees/directors till date.
22. Managerial Remuneration and particulars of employees
There were 6,800 permanent employees of the Company as of 31st March 2019. The information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as "Annexure E".
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to the top 10 names and other particulars of employees also form part of this report. However, this information is not sent along with this report pursuant to the proviso to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company.
23. Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Act are given in Notes to the Financial Statements.
24. Deposits
Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
25. Directors'' Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm:
a. that in the preparation of the annual accounts for the year ended 31st March 2019, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
b. that the directors had selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2019 and of the profit of the company for the period;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d. that the annual accounts/financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f. t hat the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
26. Conservation of energy, technology absorption, foreign exchange earnings and outgo
Pursuant to Section 134 of the Act read with Companies (Accounts) Rules, 2014, details of conservation of energy, technology absorption, foreign exchange earnings and outgo, are given in "Annexure F" to this report.
27. Unclaimed Dividend/Shares
In pursuance of Regulation 39 read with Schedule VI of the Listing Regulations, the details with respect to shares lying in unclaimed suspense account and unclaimed shares/dividend transferred to IEPF are provided in the Corporate Governance Report.
28. Compliance with Secretarial Standards
During FY 2018-19, the Company has complied with applicable Secretarial Standards issued by the Institute of The Company Secretaries of India.
29. Material changes & commitment affecting the financial position of the company
There are no material changes and commitments affecting the financial position of the company, which have occurred between the end of the financial year and the date of this report.
30. Significant & material orders passed by the Regulators or Courts or Tribunals
The Scheme of Amalgamation and Arrangement of Gabs Investments Pvt. Ltd. with the Company which was filed by the Company with National Company Law Tribunal (NCLT) in the last year, was rejected by NCLT on grounds cited in its order. The Company had preferred an appeal before the National Company Law Appellate Tribunal (NCLAT) challenging the order of NCLT. However, after considering all the pros and cons at length, it was deemed appropriate to withdraw the appeal. Accordingly, the same was withdrawn on 7th December 2018.
Save and except above, no significant or material orders have been passed against the Company by the Regulators, Courts or Tribunals, which impacts the going concern status and company''s operations in future.
31. Human Resource, Health & Safety
Industrial relations were cordial throughout the year. Health & Safety of our work force is of prime importance to us and we maintain highest standards in all the plants with adoption of best technologies and manufacturing practices which are at par with global standards.
Zero casualty and zero harm incidences demonstrates our indomitable and impeccable HSE standards.
Recognizing the fact that employees play vital role in growth of the organisation, Company undertakes various employee engagement programmes and initiatives to harness the talent pool with the objectives of building highly motivated team, promoting individual wellness and maintaining work-life balance.
Various training and grooming programs, sports events and fun events like cricket tournament, indoor sports tournament, singing competition, cooking competition, hobby classes like nail art, guitar learning, calligraphy etc. were conducted during the year as part of employee engagement initiatives.
32. Policy on sexual harassment of women at work place
The Company has in place, policy on Prevention, Prohibition and Redressal of Sexual Harassment for women at workplace in accordance with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up as per the statutory requirements, to redress complaints regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The company has not received any complaints during the year.
33. Gratitude & Acknowledgements
Your Directors place on record their appreciation for the persistent and highly inspired performance by employees across the globe. Your Directors also express their gratitude to all the stakeholders, medical professionals, business partners, government & other statutory bodies, banks, financial institutions, analysts and shareholders for their continued assistance, cooperation and support.
For and on Behalf of the Board of Directors,
Mannalal B. Agrawal
Mumbai, 30th April 2019 Chairman
Mar 31, 2018
DIRECTORS'' REPORT
Dear Shareholders,
The Directors present their Thirty-ninth Annual Report and Audited Financial Statements for the Year ended 31st March 2018.
1. Financial Results
___(Rs, in cr. except EPS)
|
Year ended 31st March |
Standalone |
Consolidated |
||||
|
2018 |
2017 |
Growth |
2018 |
2017 |
Growth |
|
|
Total Revenue |
1,830 |
1,823 |
2,131 |
2,002 |
6% |
|
|
Earnings before Interest, Depreciation and Tax (EBIDTA) |
547 |
643 |
(15%) |
658 |
699 |
(6%) |
|
Profit after Tax |
428 |
500 |
(14%) |
469 |
507 |
(8%) |
|
Total comprehensive income |
426 |
500 |
(15%) |
472 |
504 |
(6%) |
|
Earning Per Share (EPS) (?) (Basic) |
48.59 |
56.79 |
- |
53.26 |
57.59 |
- |
2. Performance Review
Company continues to operate only in one segment
i.e. pharmaceuticals and there is no change in the nature of business of the Company.
Our branded generic business performance in emerging markets has posted healthy growth in line with our expectation, whereas the India business growth has come back after the GST impact in first quarter. Despite the challenging price erosion environment in US market, we have performed well during the year.
3. Dividend
Board deferred the proposal of declaration of dividend and desired to evaluate other options to utilise the funds/reward the shareholders.
The Dividend Distribution Policy is available on website of the Company and its weblink is http://www.ajantapharma.com/AdminData/PolicyCodes/ DividendPolicy.pdf
4. Transfer to Reserves
The Company proposes to keep the entire retained earnings in Profit & Loss Account.
5. Scheme of Amalgamation and Arrangement
The Board of Directors at its meeting held on 18th March
2017 had approved the Scheme of Amalgamation and Arrangement between Ajanta Pharma Limited ("Transferee Company") and Gabs Investments Private Ltd., a promoter company ("Transferor Company") and their respective members and creditors ("Scheme of Arrangement").
The Scheme was approved by the shareholders on 10th October 2017. Further, all the Regulatory authorities viz. ROC, Regional Director, Official Liquidator and Income Tax have submitted their report to National Company Law Tribunal (NCLT). Matter is being heard at NCLT.
6. Material changes & commitment affecting the financial position of the Company
There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.
7. Significant & material orders passed by the Regulators or Courts or Tribunals
No significant or material orders have been passed against the Company by the Regulators, Courts or Tribunals, which impacts the going concern status and company''s operations in future.
8. Management Discussion and Analysis
Management Discussion and Analysis (MDA) forms part of this annual report, which is given elsewhere in the Report.
9. Report on Corporate Governance
Report on Corporate Governance is annexed and forms an integral part of this Annual Report. Certificate from the Auditors regarding compliance of conditions of Report on Corporate Governance as stipulated in the Listing Regulations is also appended to the Report on Corporate Governance.
10. Share Capital
During the year, 9,500 shares were issued under the ESOS, 2011. Consequent thereto, total paid up equity share capital of the Company as on 31st March 2018 stood at Rs, 17.60 crores divided into 8,80,14,500 Equity shares of Rs, 2/- each. Particulars of Employee Stock Options granted/vested/exercised during the year are given in "Annexure A" to this report.
11. Credit Rating
The Company''s bank facilities are rated by Credit Analysis and Research Ltd. (CARE). The Company continues to have rating Care A1 for its working capital facilities and Care AA for long term borrowings, which indicates very strong/high degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
12. Subsidiaries and Associate
Your company continues to have six subsidiaries overseas, including one step down subsidiary and there were no changes in the same during the year. Financials of subsidiaries are disclosed in the consolidated financial statements which forms part of this Annual Report. The Company does not have any Associate company.
Company''s UK subsidiary has not started any operations and management do not intend to start the operations. Hence initiated the process of closing this subsidiary.
Statement containing salient features of financial statements of subsidiaries pursuant to section 129 of the Companies Act, 2013 (Act) read with Rule 5 of the Companies (Accounts) Rules, 2014 is annexed to this Report in the prescribed Form AOC-1, as "Annexure B".
The Audited Financial Statements of Company''s subsidiary for calendar year 2017 are available on the Company''s website at www.ajantapharma.com and the same are also available for inspection at the Registered Office of the Company as per the details mentioned in notice of the 39th Annual General Meeting. Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same.
The Company has laid down policy on material subsidiaries and none of the subsidiaries are material subsidiary as per the Policy. The policy is placed on the website of the Company and its we blink is http:// www.ajantapharma.com/AdminData/PolicyCodes/ c2ea3c56-332b-4e83-a771 -f1a8934ec008PolicyonMat erialSubsidiaries.pdf
13. Directors and Key Managerial Personnel
a. There were no changes in the directors or Key Managerial Personnel during the year. However, during the year Mr. Purushottam B. Agrawal had relinquished his position of Vice-Chairman w.e.f. 14th December 2017. He continues to be Non Executive Director on the Board of the Company.
Board has re-appointed Mr. Yogesh Agrawal (DIN: 00073673) as Managing Director for a period of 5 years with effect from 1st April 2018 and Mr. Rajesh Agrawal (DIN: 00302467) as Joint Managing Director for a period of 5 years with effect from 1st May 2018. Their appointments are subject to approval of Members and other concerned authorities, if any.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 (Listing Regulations). Based on disclosures provided by Directors, none of them are disqualified from being appointed as Directors under section 164 of the Act.
Mr. Yogesh Agrawal, Managing Director (DIN: 00073673), Mr. Arvind Agrawal, Chief Financial Officer (DIN: 00648589) and Mr. Gaurang Shah, Company Secretary (FCS No.: 6696) are the Key Managerial Personnel of the Company as on the date of this Report.
b. Retirement by rotation
Mr. Mannalal B. Agrawal and Mr. Purushottam B. Agrawal, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
c. Board meetings
During the year, four Board meetings were held, details of which are given in the Report on Corporate Governance.
d. Independent Director''s familiarization programme
The Company continued with its Independent directors'' familiarization program for familiarizing them with company''s operations, regulatory and critical aspects which would enable them to effectively discharge responsibilities and functions conferred on them. Programs undertaken during the year include:
i. Corporate Strategy & plans of action
ii. GST & SAP implementation and its impact
iii. Workshop on Board Dynamics
iv. Investment of surplus funds, capex & project status
v. Risk analysis & mitigation framework of the Company
Details of familiarization programme imparted is placed on the Company''s website and its weblink is http://www.ajantapharma.com/ AdminData/DirectorFamiliarizationProgram/ Directorsfamilarisationprogramme2018.pdf
e. Evaluation of Board, Committees and Directors
Pursuant to the provisions of the Act and the Listing Regulations, the Board had carried out performance evaluation of its own, the Board Committees and of the Independent directors. Further, Independent Directors at a separate meeting evaluated performance of the Non Independent Directors, Board as a whole and of the Chairman of the Board.
Manner in which the evaluation has been carried out and matters incidental thereto, have been detailed in the Report on Corporate Governance, which forms part of this report.
f. Policy on appointment and remuneration of Directors
Details of criteria laid down for appointment of Directors and policy on remuneration of Directors are given in the Report on Corporate Governance.
14. Audit Committee
The details pertaining to composition of Audit Committee are included in the Report on Corporate Governance.
15. New projects
Your company has commenced commercial production at its new manufacturing facility at Dahej, which is already approved by USFDA. Further, the Guwahati facility has commenced cream and ointment section, in addition to tablet section operational zed last year. Your company proactively assesses its requirement of infrastructure for future growth and continuously invests in the same.
16. Auditors and Audit reports
a. Statutory Auditors
Auditor''s Report for the year under review does not contain any qualifications, reservations or adverse remarks.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Alwyn Dsouza & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as "Annexure C". There are no qualifications, reservation or adverse remark in the report.
c. Cost Auditors
Pursuant to Section 1 48 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules 2014, as amended from time to time, the cost audit records maintained by the Company are required to be audited by cost accountant. Company has appointed M/s. Sevekari, Khare & Associates, Practicing Cost Accountants to audit the cost records of the Company for the financial year 2018-19. The remuneration payable to them is required to be ratified by the Shareholders at the ensuing Annual General Meeting and accordingly, a resolution seeking ratification has been included as Item No. 4 of the Notice convening the Annual General Meeting.
The Cost Audit Report for the FY 2017 has been filed with the Ministry of Corporate Affairs on 15th September 2017.
During the year under review, the statutory auditors, secretarial auditors and cost auditors have not reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
17. Internal Control System, Risk Management and Compliance Framework
Company has in place well defined and adequate internal financial control framework. During the year, such controls were tested and no material weakness in their design of operations were observed. Risk Management system followed by the Company is detailed in the Management Discussion and Analysis.
18. Vigil Mechanism/Whistle Blower policy
The Company has set up vigil mechanism viz. Whistle Blower Policy to enable the employees and Directors to report to the Audit Committee Chairman, genuine concerns, unethical behavior and irregularities, if any, noticed by them in the Company, which could adversely affect company''s operations. It is posted on the intranet of the Company. The same is reviewed by the Audit Committee from time to time. No concerns or irregularities have been reported by employees/directors till date.
19. Related Party Transactions and Policy
Most of the Related Party transactions (RPTs) entered during the financial year were with the Company''s wholly owned subsidiaries and donations to charitable trusts for CSR activities. These were on an arm''s length basis and in the ordinary course of business. As such, no particulars of such contracts or arrangements are furnished with this report. All the RPTs affected during the year are disclosed in the notes to Financial Statements.
The Board has approved and adopted Policy on Related Party Transactions and the same is uploaded on the Company''s website and its we blink is http://www.ajantapharma.com/AdminData/ PolicyCodes/2018PolicyonRelatedPartyTransactions. pdf
20. Managerial Remuneration and particulars of employees
Information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as "Annexure D".
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to the top ten names and other particulars of employees also form part of this report. However, this information is not sent along with this report pursuant to the proviso to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/Compliance Officer at the registered office address of the Company.
21. Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
22. Corporate Social Responsibility (CSR)
The Company''s CSR Policy primarily rests on three broad tenets viz., Healthcare, Education & Community welfare and the same is within the ambit of Schedule VII of the Act. During the year, Company continued several initiatives under the CSR program, directly as well as through agencies permitted under the Act. Details of CSR policy and CSR activities undertaken during the year is annexed to this report as "Annexure E" and are also given elsewhere in this report.
|
# |
Particulars |
Shareholders |
No. of shares |
|
1. |
Outstanding shares at the beginning of the year |
33 |
27,250 |
|
2. |
Shareholders approached the Company for transfer |
3 |
2,250 |
|
3. |
Shareholders whose shares were transferred from suspense account |
3 |
2,250 |
|
4. |
Shares transferred to IEPF account |
4* |
2,500 |
|
5. |
Outstanding shares at the end of the year |
30 |
22,500 |
*Partially transferred to IEPF and partially remaining in suspense account.
Voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.
Further, during the year 26,260 shares on which dividend had remained unclaimed for last 7 years were transferred to Investor Education & Protection Fund in accordance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, after complying due procedure. Members desirous of claiming their shares may refer to the refund procedure for claiming the aforementioned amounts/shares transferred to the IEPF Authority, as detailed on www.iepf.gov.in.
Underlying shares on which dividend has remained unclaimed from 2010-11 onwards, will be due for transfer to IEPF account during the year and individual notices to that effect will be sent to concerned shareholders. Shareholders who have not yet encashed their unclaimed/unpaid amounts are requested to correspond with the Company''s Registrar and Transfer Agents, at the earliest to avoid transfer of dividend and underlying shares to IEPF.
23. Deposits
Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
24. Green initiative
The Ministry of Corporate Affairs had taken the Green Initiative in Report on Corporate Governance by allowing paperless compliances by Companies through electronic mode.
Your Company supports the Green Initiative and has accordingly decided to send necessary communications to its Shareholders to their respective registered E-mail addresses.
Your Company appeals to you, its Shareholders, who are yet to register the E-mail addresses that they take necessary steps for registering the same so that you can also become a part of the initiative and contribute towards a Greener environment.
25. Unclaimed shares & dividend
In pursuance of Regulation 39 read with Schedule VI of the Listing Regulations, the Company has in FY 2017, transferred 27,250 unclaimed shares belonging to 33 shareholders, to the ''Unclaimed Suspense Account'' opened for the purpose, after following due process. Details of shares transferred to the suspense account, claimed during the year and balance as on 31st March 2018, are given below:
26. Extract of the Annual Return
The extract of the Annual Return in form MGT 9 is annexed to this report as "Annexure F".
27. Directors'' Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm:
a. that in the preparation of the annual accounts for the year ended 31st March 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
b. that the directors had selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2018 and of the profit of the Company for the year;
c. t hat proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the annual accounts/financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
28. Conservation of energy, technology absorption, foreign exchange earnings and outgo
The information relating to Conservation of energy, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134 of the Act read with Companies (Accounts) Rules, 2014 is annexed to this report as "Annexure G".
29. Business Responsibility Report
In compliance with Regulation 34(2) of Listing Regulations, your Company has included Business Responsibility Report, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective. However, as a Green Initiative, the BRR for FY 2018 has been hosted on the Company''s website, which can be accessed at http://www.ajantapharma.com/ AnnualReports.aspx Any Member interested in obtaining a copy of BRR may write to the Company Secretary.
30. Human Resource
The Company recognizes that the employees are the most valuable resource and endeavors to empower its employees to meet business excellence while meeting their career aspirations. It continues to focus on progressive employee relations, policies and building high performance culture with the growth mindset where employees are engaged, productive and efficient. Industrial relations were cordial throughout the year.
Programs like Lose to Win, Safety First, various sports tournaments, inbound & outbound training programs, recreational and team building activities, etc. are part of the total employee experience helping to promote individual wellness while balancing the needs of the work, family and society.
31. Policy on sexual harassment of women at work place
The Company has in place, policy on Prevention, Prohibition and Redressal of Sexual Harassment for women at workplace in accordance with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up as per the statutory requirements, to redress complaints regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The company has not received any complaints during the year.
32. Gratitude & Acknowledgements
Your Directors place on record their sincere appreciation for the steadfast commitment and highly motivated performance by employees at all levels across the globe which was instrumental in sustained performance of the Company. Your Directors also sincerely thank all the stakeholders, medical professionals, business partners, government & other statutory bodies, banks, financial institutions, analysts and shareholders for their continued assistance, cooperation and support.
For and on Behalf of the Board of Directors,
Mannalal B. Agrawal
Mumbai, 2nd May 2018 Chairman
Mar 31, 2016
Dear Shareholders,
The Directors take pleasure in presenting Thirty Seventh Annual Report
and Audited Financial Statements for the Year ended 31st March 2016.
1. Financial Results
(Rs. in crores except EPS)
Standalone Consolidated
Year ended 31st
March 2016 2015 Growth 2016 2015 Growth
Total Revenue 1634.11 1389.90 18% 1744.16 1490.35 17%
EBITDA 515.85 472.56 9% 580.72 505.23 15%
Profit After Tax 414.48 306.37 35% 401.41 309.86 30%
Transfer to
General Reserve 330.00 160.00 - 321.49 182.13 -
Earnings Per
Share (EPS)
(Rs.) 47.10 34.84 - 45.62 35.24 -
2. Dividend
During the financial year 2015-16, your Company declared and paid an
interim dividend of Rs. 8 (400%) per equity share of the face value of
Rs. 2 each in the month of March, 2016. Total dividend payout was Rs.
70.40 crores excluding dividend distribution tax.
With a view to conserve resources for funding the growth and CAPEX
plans of the Company, Directors recommend interim dividend to be
considered as final dividend and no additional dividend is recommended.
3. Performance Review
Company posted impressive performance during the year under review.
While India business contributed 31% of the total sales, balance was
contributed by international business. We continued to strengthen our
presence in the markets we operate in.
Company continues to operate only in one segment i.e. pharmaceuticals
and there is no change in the nature of business of the company. There
are no material changes and commitments affecting the financial
position of the company, which have occurred between the end of the
financial year and the date of this report.
No significant or material orders have been passed against the Company
by the regulators, courts or tribunals, which impacts the going concern
status and company''s operations in future.
4. Management Discussion and Analysis
Management Discussion and Analysis (MDA) forms part of this annual
report, which is given elsewhere in the Report.
5. Share Capital
During the year, 57,750 shares were issued under ESOS, 2011. Consequent
thereto, total paid up equity share capital of the Company as on 31st
March 2016 stood at Rs. 17.60 crores divided into 8,80,01,250 shares of
Rs. 2/- each. Particulars of Employee Stock Options granted/
vested/exercised during the year are given in "Annexure A" to this
report.
6. Credit Rating
Your Company''s bank facilities have been rated by Credit Analysis and
Research Limited (CARE) during June 2015. The Company has received the
highest rating A1 (A1 plus) for its short term facilities as per which
Instruments with this rating are considered to have very strong degree
of safety regarding timely payment of financial obligations. Such
instruments carry lowest credit risk. For the long term borrowings,
Company''s rating has improved to AA (Double A), which indicates high
degree of safety regarding timely servicing of financial obligations.
Such instruments carry very low credit risk.
7. Subsidiaries/Joint Ventures
Your company continues to have six subsidiaries overseas, including one
step down subsidiary and there were no changes in the same during the
year. Financials of subsidiaries are disclosed in the consolidated
financial statements which forms part of this Annual Report. Company
has one Joint Venture (JV) in Turkmenistan namely, Turkmenderman Ajanta
Pharma Limited, where it does not have significant influence as day to
day management is controlled by the JV partner. JV operates under
severe restriction that significantly impairs its ability to transfer
the funds and its performance is not satisfactory. Company is therefore
looking for divestment of this JV and as such, JV''s accounts are not
consolidated.
Statement containing salient features of financial statements of
subsidiaries pursuant to section 129 of the Companies Act, 2013 (Act)
read with Rule 5 of the Companies (Accounts) Rules, 2014 is annexed to
this Report in the prescribed Form AOC-I, as "Annexure B". Financial
statements of the subsidiary companies are available for inspection by
the shareholders at the registered office of the company. The Company
has laid down policy on material subsidiaries and none of the
subsidiaries are material subsidiary as per the Policy. The policy is
placed on the website of the Company at
http://www.ajantapharma.com/AdminData/PolicyCodes/
c2ea3c56-332b-4e83-a771-f1a8934ec008PolicyonMate rialSubsidiaries.pdf
8. Directors
a. There were no changes in the directors or Key Managerial Personnel
during the year. All Independent Directors have given declarations that
they meet the criteria of independence as laid down under Section
149(6) of the Act and the Listing Regulations. Based on disclosures
provided by Directors, none of them are disqualified from being
appointed as Directors under section 164 of the Companies Act, 2013.
b. Retirement by rotation
Mr. Mannalal B. Agrawal and Mr. Purushottam B. Agrawal retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. Board recommends their
re-appointment for approval of members.
c. Board meetings
During the year, fve Board meetings were held, details of which are
given in the Corporate Governance Report.
d. Independent Directors'' familiarization programme
The Company undertook directors'' familiarization programme for
familiarizing them with company''s operations and other relevant
information which would enable them to effectively discharge the
responsibilities and functions conferred on them. Details of
familiarization programme imparted is placed on the company''s website
at http://www.ajantapharma.
com/AdminData/DirectorFamiliarizationProgram/
f73bfdc3-59a4-47bd-bad7-59591e9e630fDirectorsFa
miliarizationProgramme.pdf.
e. Evaluation of Board, Committees and Directors
Pursuant to the provisions of the Act and the Listing Regulations, the
Board had carried out performance evaluation of its own, the Board
Committees and of the Independent directors. Further, Independent
Directors at a separate meeting, evaluated performance of the Non-
Independent Directors, Board as a whole and of the Chairman of the
Board. Manner in which the evaluation has been carried out has been
detailed in the Corporate Governance Report.
f. Policy on appointment and remuneration of Directors
The Board has on the recommendation of the Nomination & Remuneration
Committee, formulated criteria for determining Qualifications, Positive
Attributes and Independence of a Director as also a Policy for
remuneration of Directors, Key Managerial Personnel and senior
management. The details of criteria laid down and the Remuneration
Policy are given in the Corporate Governance Report.
9. Capex/New projects
Your Company is committed to continuously invest in the infrastructure
well in advance to complement its growth plans and to cater to
customers in more efficient and cost-effective manner. As a step in
this direction, new state-of-the-art manufacturing unit facility is
already established at Dahej and commercial production will commence by
early next financial year. The Company is setting up another
manufacturing facility at Guwahati and construction of this facility is
in progress and the same will be operational before 31st March 2017.
Total cost of this project is estimated at Rs. 300 crores.
10. Auditors
a. Statutory Auditors
Auditors'' Report for the year under review does not contain any
qualifications or adverse remarks.
Company''s statutory auditors, M/s. Kapoor & Parekh Associates,
Chartered Accountants, Mumbai, hold office till the conclusion of
ensuing Annual General Meeting and are eligible for re-appointment.
They have expressed their willingness to get re- appointed at the
ensuing Annual General Meeting and have confirmed that their
appointment, if made, will be in accordance with the provisions of
section 139 & 141 of the Act and that they are holding peer review
certificate.
The Board based on recommendation of Audit Committee, recommends their
re-appointment for approval of members.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company had appointed M/s. Alwyn D''Souza & Company, a firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report is annexed to this report as
"Annexure C". There are no qualifications, reservation or adverse
remark in the report.
c. Cost Auditors
Pursuant to Section 148 of the Act read with the Companies (Cost
Records and Audit) Amendment Rules, 2014, the Board has on the
recommendation of the Audit Committee, appointed M/s. Sevekari, Khare &
Associates, Practicing Cost Accountants to audit the cost records of
the Company for the financial year 2016-17. The Board recommends
ratification of their remuneration by members at the ensuing Annual
General Meeting.
11. Internal Control System and compliance framework
The Company has well defined and adequate Internal Control System,
commensurate with size, scale and complexity of its operations. The
internal financial controls are adequate and are operating effectively
so as to ensure orderly and efficient conduct of business operations.
During the year, Internal Financial Controls (IFC) testing process was
done in order to review adequacy and strength of IFC followed by the
Company. As per the assessment, there are no major concerns and
Controls are strong.
The Board has also put in place requisite legal compliance framework to
ensure compliance of all the applicable laws and that such systems were
adequate and operating effectively.
12. Risk Management
Company has implemented an integrated risk management approach through
which it reviews and assesses significant risks on a regular basis to
ensure that a robust system of risk controls and mitigation is in
place. Senior management periodically reviews this risk management
framework to keep updated and address emerging challenges.
Risk management system followed by the Company is elaborately detailed
in the MDA.
13. Vigil Mechanism
The Company has set up vigil mechanism viz. Whistle Blower Policy to
enable the employees and Directors to report genuine concerns,
unethical behaviour and irregularities, if any, in the Company noticed
by them which could adversely affect company''s operations, to the Audit
Committee Chairman. It is posted on the intranet of the Company. The
same is reviewed by the Audit Committee from time to time. No concerns
or irregularities have been reported till date.
14. Related Party Transactions and Policy
All Related Party transactions (RPTs) entered during the financial year
were on an arm''s length basis and in the ordinary course of business.
For RPTs which are foreseen and repetitive in nature, omnibus approval
of Audit Committee is obtained at the beginning of the financial year,
as per RPT policy. All the RPTs affected during the year are disclosed
in the notes to Financial Statements.
There are no materially significant RPTs made by the Company which may
have a potential conflict with the interest of the Company at large and
thus disclosure in Form AOC-2 is not required. The Board has approved
and adopted Policy on Related Party Transactions and the same is
uploaded on the Company''s website at
http://www.ajantapharma.com/AdminData/PolicyCodes/
ec6023bc-420f-438c-94f9-506925ee2cf4PolicyonRela
tedPartyTransactions.pdf
15. Managerial Remuneration and particulars of employees
Information to be disclosed pursuant to Section 197(12) of the Act read
with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 forms part of this report. However,
this information is not sent along with this Report as per the
provisions of Section 136 of the Act. Members interested in obtaining
these particulars may write to the Company Secretary at the Registered
Office of the Company. Aforesaid Annexure is also available for
inspection by Members at the Registered Office of the Company, 21 days
before the 37th Annual General Meeting and upto the date of Annual
General Meeting during the business hours on working days.
16. Loans, guarantees or investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act are given in the notes to the
Financial Statements.
17. Corporate Social Responsibility (CSR)
Pursuant to the provisions of section 135 of the Act, read with CSR
Rules, the Company has constituted CSR committee and formulated CSR
policy. The Policy primarily rests on four broad tenets: Healthcare,
Education, Community Development and Ecology and the same is within the
ambit of Schedule VII of the Act. During the year, the Company
undertook several initiatives under the CSR programmme. Details of CSR
policy and CSR activities undertaken during the year is annexed to this
report as "Annexure D".
18. Deposits
Your Company has not accepted any deposits from the public falling
within the purview of Section 73 of the Act read with the Companies
(Acceptance of Deposits) Rules, 2014.
19. Unclaimed dividend and unclaimed shares
In respect of share certificates sent to shareholders and returned
undelivered, the company has initiated the process of sending reminders
to concerned shareholders. After completing the process, unclaimed
shares, if any, will be transferred to ''Unclaimed Suspense Account'' as
per the procedure laid down under the Listing Regulations.
20. Extract of the annual return
The extract of the Annual Return in form MGT 9 is annexed to this
report as "Annexure E".
21. Directors'' Responsibility Statement
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors confirm:
a. that in the preparation of the annual accounts for the year ended
31st March 2016, the applicable Accounting Standards had been followed
along with proper explanation relating to material departures, if any;
b. that the directors had selected accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year ended 31st March 2016
and of the profit of the company for the year;
c. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the company and for preventing and
detecting fraud and other irregularities;
d. that the annual accounts/financial statements have been prepared on
a going concern basis;
e. that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively;
f. that the Directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
22. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The information relating to Conservation of energy, technology
absorption, foreign exchange earnings and outgo, pursuant to Section
134 of the Act read with Companies (Accounts) Rules, 2014 is annexed to
this report as "Annexure F" and forms part of this report.
23. Corporate Governance
Report on Corporate Governance is annexed and forms an integral part of
this Annual Report. Certificate from the Auditors regarding compliance
of conditions of Corporate Governance as stipulated in the Listing
Regulations is also appended to the report on Corporate Governance.
24. Human Resource
Your company firmly believes that employees are the most valuable
assets and key players of business success and sustained growth. The
Company continued to conduct various employee benefit, recreational and
team building programs to enhance employee skills, motivation as also
to foster team spirit. Company also conducted in-house training
programs to develop leadership as well as technical/functional
capabilities in order to meet future talent requirements. Industrial
relations were cordial throughout the year.
25. Policy on sexual harassment of women at work place
The Company has in place, policy on Prevention, Prohibition and
Redressal of Sexual Harassment for women at workplace in accordance
with the requirements of The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. An Internal
Complaints Committee (ICC) has been in place to redress complaints
received regarding sexual harassment. The policy has set guidelines on
the redressal and enquiry process that is to be followed by
complainants and the ICC, whilst dealing with issues related to sexual
harassment at the work place. All women employees are covered under
this policy. The company has not received any complaints during the
year.
26. Gratitude & Acknowledgements
Your Directors place on record their high appreciation for the
unflinching commitment, dedication, hard work and valuable contribution
made by employees across the globe for sustained growth of the Company.
Your Directors also sincerely thank all the stakeholders, medical
professionals, business partners, government & other statutory bodies,
banks, financial institutions, analysts and shareholders for their
continued assistance, co-operation and support.
For and on behalf of the Board of Directors
Sd/-
Mannalal B. Agrawal
Chairman
Mumbai, 29th April 2016
Mar 31, 2015
Dear Shareholders,
The Directors have pleasure in presenting their report on the business
operations and accounts of the Company for the Year ended 31st March
2015 along with 36th Annual Report.
FINANCIAL SUMMARY /PERFORMANCE OF THE COMPANY
Rs. in Crore
Standalone Consolidated
Year ended 31st
March 2015 2014 Growth 2015 2014 Growth
Total Income 1389.90 1,127.64 23% 1497.36 1,222.05 23%
EBITDA 472.56 346.04 37% 505.23 368.75 37%
Profit before Tax 451.83 313.06 44% 464.47 329.85 41%
Profit after Tax 306.37 220.86 39% 309.86 233.88 32%
Earnings Per
Share (EPS) 34.84 25.13 - 35.24 26.62 -
The Company proposes to transfer an amount of Rs. 160 Crore to the
General Reserve. An amount of Rs. 119.40 Crore is proposed to be retained
in the statement of Profit and loss.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 6/- per equity
share on the face-value of Rs. 2/- each for the year ended 31st March
2015.
PERFORMANCE REVIEW
Company posted remarkable performance during the year under review.
Consolidated sales scaled up by 23% over the previous year. Profit
before interest, depreciation and tax (EBITDA) went up by 37%, whereas
Profit after tax was higher by 32% over the previous year. Export sales
contributed 66% of the revenue and domestic accounted for the rest. For
the last 5 years, the Company has consistently posted healthy
performance with its consolidated revenue showing a CAGR of 31% and net
profit of 57%.
The Company continues to operate only in one segment i.e
pharmaceuticals and there is no change in the nature of business of the
Company.
There are no material changes and commitments affecting the financial
position of the Company, which have occurred between the end of the
financial year of the Company and the date of this report.
No significant or material orders passed or have been passed against
the Company by the regulators, courts, or tribunals, which impacts the
going concern status and Company''s operations in future.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed Management Discussion and Analysis forms part of this annual
report, which is given elsewhere in the Report.
SHARE CAPITAL
During the year, 26,700 shares were issued and listed under ESOS, 2011.
Further, the Company sub-divided face value of its equity shares from Rs.
5/- to Rs. 2/- per share after taking approval of the members. Consequent
thereto, total paid up equity share capital of the Company as on 31st
March 2015 stands at Rs. 17.58 Crore divided into 8,79,43,500 shares of Rs.
2/- each.
EMPLOYEES STOCK OPTION SCHEME
Particulars of Employee Stock Options under ESOS 2011 are given in
"Annexure A" to this report.
CREDIT RATING
Your Company''s bank facilities have been rated by Credit Analysis and
Research Limited (CARE) during September 2014. The Company has received
the highest rating A (A plus) for its short term facilities as per
which Instruments with this rating are considered to have very strong
degree of safety regarding timely payment of financial obligations.
Such instruments carry lowest credit risk. For the long term
borrowings, the Company has received AA- (Double A minus), which
indicates high degree of safety regarding timely servicing of financial
obligations. Such instruments carry very low credit risk.
SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES
a. Your Company has six subsidiaries overseas, including one step down
subsidiary and has one Joint Venture (JV) company. Financials of
subsidiaries are disclosed in the consolidated financial statements,
which forms part of this Annual Report. The Company does not have
significant influence on its JV in Turkmenistan namely, Turkmenderman
Ajanta Pharma Limited (TDAPL) as day-to-day management is controlled by
the JV partner and the JV operates under severe restriction that
significantly impairs its ability to transfer the funds to the Company.
The Company is therefore looking for divestment of this JV and as such,
JV''s accounts are not consolidated.
Statement containing salient features of financial statements of
subsidiaries pursuant to section 129 of the Companies Act, 2013 (Act)
read with Rule 5 of the Companies (Accounts) Rules,2014 is annexed to
this Report as "Annexure B" in the prescribed Form AOC-I.
The Financial statements of the subsidiary companies are kept for
inspection by the shareholders at the registered office of the Company.
The Company has laid down policy on Material subsidiary and the same is
placed on the website of the Company at www.ajantapharma.com (www.
ajantapharma.com/financials/Investor Articles/
Policy%20on%20Material%20Subsidiaries.pdf). None of the subsidiaries
are material subsidiary as per the Policy.
DIRECTORS
a. Appointment of Mr. Prabhakar Dalal and Dr. Anjana Grewal as
Independent Directors was confirmed by the members at the Annual
General Meeting held on 5th August 2014. Apart from this, there were no
changes in the directors or Key Managerial Personnel during the year.
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the Act
and Clause 49 of the Listing Agreement.
Mr. Rajesh M. Agrawal retires by rotation at the ensuing Annual General
Meeting and being eligible offer himself for re-appointment.
Mr. Madhusudan B. Agrawal, was appointed as Whole time Director of the
Company for five years w.e.f. 1st April 2010. The Board has on the
recommendation of the Nomination and Remuneration Committee,
reappointed him as Vice Chairman and Executive Director for another
term of 5 years w.e.f. 1st April 2015, on the terms and condition
including remuneration set out in the Agreement and subject to approval
of members.
The Board recommends re-appointment of Mr. Rajesh M. Agrawal and Mr.
Madhusudan B. Agrawal at the ensuing Annual General Meeting. Based on
disclosures provided by them, none of them are disqualified from being
appointed as Directors as per section 164 of the Companies Act, 2013.
b. Board meetings
During the year, five Board meetings were held, with gap between
Meetings not exceeding the period prescribed under the Act. Details of
Board and Board committee meetings held during the year are given in
the Corporate Governance Report.
Board meeting dates are finalised in consultation with all directors
and agenda papers backed up by comprehensive notes and detailed
background information are circulated well in advance before the date
of the meeting thereby enabling the Board to take informed decisions. A
detailed presentation is also made to apprise the Board of important
developments in industry, segments, business operations, marketing,
products etc.
c. Independent Director''s familiarisation Programme
As per requirements under the Listing Agreement, the Company undertook
directors'' familiarisation programme for Independent Directors in order
to familiarise them with business model, management structure, product
portfolio, Industry overview, manufacturing operations, internal
control system and processes, FOREX management, risk management
framework, functioning of various divisions, HR Management, CSR
activities etc. Details of such familiarisation programme is placed on
the Company''s website at www.ajantapharma.com (www.
ajantapharma.com/financials/Investor Articles/ FPFID.pdf).
d. Evaluation of Board, Committees and Directors
Pursuant to the provisions of the Act and Clause 49 of the Listing
Agreement, the Board had carried out performance evaluation of its own,
the Board Committees and of the Independent directors. Independent
Directors at a separate meeting evaluated performance of the
Non-Independent Directors, Board as a whole and of the Chairman of the
Board. The manner in which the evaluation has been carried out has been
detailed in the Corporate Governance Report.
e. Policy on appointment and remuneration of Directors
The Board has on the recommendation of the Nomination & Remuneration
Committee, formulated criteria for determining Qualifications, Positive
Attributes and Independence of a Director as also a Policy for
remuneration of Directors, Key managerial Personnel and senior
management. The details of criteria laid down and the Remuneration
Policy are given in the Corporate Governance Report.
CAPEX
Your Company is committed to continuously invest in the infrastructure
well in advance to complement its growth plans. It demonstrates the
vision and foresight of the management to anticipate the future
requirements and take bold initiatives at the right time. When building
the facilities and infrastructure, Company has been guided with its
philosophy of doing the best in uncompromising way and giving lot of
attention to details. The work on new Dahej facility is just completed
and management has already started work on another new facility.
The Dahej facility has been specially constructed for catering to the
requirements of markets like USA, WHO and Emerging Markets with a total
investment of about Rs.220 Crore. It has world class standard, employing
latest technology and state of the art machinery complying with USFDA /
UKMHRA / WHO standards. This new facility has capacities to
manufacture annually 1,740 Million Tablets, 216 Million Capsules and
150 Million Powder sachets. The facility will start taking validation
batches in next few months.
The Company is also expanding its R & D facilities at Mumbai to cater
to the growing needs. This expansion will take about 2 years and has
spent Rs. 70 Crore on the same during the year.
AUDITORS
a. Statutory Auditors
Your Company''s statutory auditors, M/s. Kapoor & Parekh Associates,
Chartered Accountants, Mumbai, retire at the conclusion of ensuing
Annual General Meeting. Your Company has received a letter from them to
the effect that their reappointment, if made, will be in accordance
with the provisions of section 139 & 141 of the Act, and are eligible
for re-appointment, holding peer review certificate. Audit Committee
and the Board recommend their reappointment.
The remarks as contained in the Auditor''s Report read with Notes
forming part of the accounts are self-explanatory.
b. Cost Auditors
Pursuant to Section 148 of the Act, read with the Companies (Cost
Records and Audit) Amendment Rules, 2014, the cost audit records
maintained by the Company in respect of its Bulk Drugs and Formulations
activity are required to be audited by cost auditors. The Board has on
the recommendation of the Audit Committee, appointed M/s. Sevekari,
Khare & Associates, Practicing Cost Accountants to audit the cost
accounts of the Company for the financial year 2015-16 on a
remuneration of Rs. 3 lacs, subject to ratification by members.
Accordingly, a resolution seeking Member''s ratification for the
remuneration payable to M/s. Sevekari, Khare & Associates, Cost
Auditors is included at Item No. 7 of the Notice convening the Annual
General Meeting.
c. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed M/s. Alwyn D''Souza & Company, a firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report is annexed herewith as "Annexure
C". There is no qualification, reservation or adverse remark in the
report.
INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK
The Company has an Internal Control System, commensurate with size,
scale and complexity of its operations. The internal financial controls
are adequate and are operating effectively so as to ensure orderly and
efficient conduct of business operations.
The Company has appointed M/s. Mahajan & Aibara as Internal Auditors of
the Company. The Audit Committee in consultation with the internal
auditors formulates the scope, functioning, periodicity and methodology
for conducting the internal audit. The internal auditors carry out
audit, covering inter alia, monitoring and evaluating the efficacy and
adequacy of internal control systems in the Company, its compliance
with operating systems, accounting procedures and policies at all
locations and submit their periodical internal audit reports to the
Audit Committee. Based on the internal audit report and review by the
Audit committee, process owners undertake necessary actions in their
respective areas. The internal auditors have expressed that the
internal control system in the Company is robust and effective.
The Board has also put in place requisite legal compliance framework to
ensure compliance of all the applicable laws and that such systems are
adequate and operating effectively.
RISK MANAGEMENT
Company has implemented an integrated risk management approach through
which it reviews and assesses significant risks on a regular basis to
help ensure that there is a robust system of risk controls and
mitigation in place. Senior management periodically reviews this risk
management framework to keep updated and address emerging challenges.
Major risks identified for the Company by the management are Currency
fluctuation, Compliance, Regulatory changes, Manufacturing & Supply,
Litigation, Information Technology and new capital investments return.
The management is however, of the view that none of the above risks may
threaten the existence of the Company as robust Risk mitigation
mechanism is put in place to ensure that there is nil or minimum impact
on the Company in case any of these risks materialise.
VIGIL MECHANISM
The Company has set up vigil mechanism viz. Whistle Blower Policy to
enable the employees and Directors to report genuine concerns and
irregularities, if any in the Company, noticed by them. It is posted on
the intranet of the Company. The same is reviewed by the Audit
Committee from time to time.
RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company which may have a potential conflict
with the interest of the Company at large and thus disclosure in Form
AOC-2 is not required.
The Board has formulated Policy on Related Party Transactions and the
same is uploaded on the Company''s website at www.ajantapharma.com
(www.ajantapharma. com/financials/Investor Articles/Policy%20on%20
Related%20Party%20Transactions.pdf).
None of the Non-Executive Directors has any pecuniary relationship or
transactions with the Company other than sitting fees and commission
payable to them.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act,
2013 read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 forms part of this Report.
The above information is not being sent along with this Report to the
Members of the Company as per the provision of Section 136 of the
Companies Act, 2013. Members who are interested in obtaining these
particulars may write to the Company Secretary at the Registered Office
of the Company. The aforesaid Annexure is also available for inspection
by Members at the Registered Office of the Company, 21 days before the
36th Annual General Meeting and upto the date of the Annual General
Meeting during the business hours on working days.
LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments, if any covered under the
provisions of Section 186 of the Act are given in the notes to the
Financial Statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of section 135 of the Act, read with CSR
Rules, the Company has constituted CSR committee and formulated CSR
policy. The Policy primarily rests on four broad categories:
Healthcare, Education, Community Development and Ecology. During the
year, the Company undertook several initiatives under the CSR program.
The details of CSR policy and CSR activities undertaken during the year
are annexed herewith as "Annexure D".
DEPOSITS
Your Company has not accepted any deposits from the public falling
within the purview of Section 73 of the Act, read with the Companies
(Acceptance of Deposits) Rules, 2014.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in form MGT 9 is annexed herewith as
"Annexure E".
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors confirm:
a. that in the preparation of the annual accounts for the year ended
31st March 2015, the applicable Accounting Standards had been followed
along with proper explanation relating to material departures, if any;
b. that the directors had selected accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31st March 2015 and
of the profit of the Company for that period;
c. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d. that the annual accounts/financial statements have been prepared on
a going concern basis;
e. that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively;
f. that the Directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information relating to Conservation of energy, technology
absorption, foreign exchange earnings and outgo, pursuant to Section
134 of the Act, read with the Companies (Accounts) Rules, 2014 is given
as "Annexure F" and forms part of this report.
CORPORATE GOVERNANCE
Report on Corporate Governance is given elsewhere in this Annual
Report. Certificate from the Auditors regarding compliance of
conditions of Corporate Governance as stipulated in Clause 49 of the
Listing Agreement with Stock Exchanges is also appended to the report
on Corporate Governance.
HUMAN RESOURCE
Your Company firmly believes that employees are the most valuable
assets and key players of business success and sustained growth.
Various employee benefits, recreational and team building programs are
conducted to enhance employee skills, motivation as also to foster team
spirit. Company also conducts in-house training programs to develop
leadership as well as technical/functional capabilities in order to
meet future talent requirements. Industrial relations were cordial
throughout the year.
GRATITUDE & ACKNOWLEDGMENTS
Your Directors place on record their earnest appreciation for the
unstinted commitment, dedication, hard work and significant
contribution made by employees across the globe in ensuring sustained
growth of the Company. Your Directors also sincerely thanks all the
stakeholders, medical professionals, business partners, government,
other statutory bodies, banks, financial institutions, analysts and
shareholders for their continued assistance, co-operation and support.
For and on behalf of the Board of Directors
Mannalal B. Agrawal
Chairman
Mumbai, 8th May 2015
Mar 31, 2013
The directors have pleasure in presenting their report on the business
and operations of your company along with Thirty Fourth Annual Report
for the year ended 31st March, 2013.
Financial Results (Rs. Crores)
Standalone Consolidated
2013 2012 Growth 2013 2012 Growth
Total Income 846.61 605.48 39% 933.04 678.65 37%
EBITDA 207.28 123.23 68% 224.29 137.00 64%
Profit before Tax 163.51 79.75 105% 176.79 90.96 95%
Profit after Tax 101.12 66.49 52% 112.11 77.27 45%
Earnings Per
Share (EPS) (Rs.) 43.17 28.39 47.87 32.99
Dividend
Your Directors are pleased to recommend a dividend of Rs.6.25 per
equity share on the face-value of Rs.5/- each for the year ended 31st
March, 2013.
Performance Review
During the year, your company''s performance has been excellent both
at Stand Alone and Consolidated level. Operational Income grew by 39%
in Stand Alone results with 52% growth in Net Profit. Exports
contributed 65% of Total Revenue, which indicates a balanced growth in
both the segments of domestic and exports business over years. During
the year, income tax provision has seen sharp increase as all carry
forward losses were exhausted and a liability of Rs.15.75 crs. was
provided towards previous years. Consolidated results kept the pace
with equally good performance by both subsidiaries. Consolidated
Operational Income grew by 37%, whereas Net Profit has seen a growth of
45%.
Management Discussion and Analysis A detailed Management Discussion and
Analysis forms part of this annual report which is given in the
beginning pages.
Share Capital
During the year, number of equity shares of your company increased two
fold consequent to split in face value of shares from Rs.10/- each to
Rs.5/- each.
Credit Rating
Credit Analysis and Research Limited (CARE) has upgraded its rating for
short term facilities of your company to CARE A1 (pronounced as "A
One Plus"), the highest credit quality by CARE for such borrowings.
It also reaffirmed CARE A (pronounced as "A Plus") rating for long
term facilities of your company.
Subsidiary Companies
As on 31st March, 2013, your company had 5 subsidiaries overseas,
including one step down subsidiary. During the year, for administrative
convenience, old subsidiary in US was wound up and new subsidiary was
formed. However, there was no impact on the operations due to this
change. Statement pursuant to section 212 of the Companies Act 1956
forms part of this annual report. Consolidated Financial Statements
incorporating results of all subsidiaries as per Accounting Standards
AS21 prescribed by the Institute of the Chartered Accountants of India
is also enclosed.
Joint Venture
There is no improvement in the performance of your Company''s joint
venture in Turkmenistan, which continues to be under performing and we
continue to explore exit options from this JV.
Directors
Mr. Madhusudan B. Agrawal and Mr. Chandrakant M. Khetan, the Directors
of your Company, retire by rotation and being eligible, offer
themselves for re- appointment.
Mr. Yogesh M. Agrawal & Mr. Purushottam B. Agrawal are Executive
Directors, whose terms are ending on 31st March, 2013. As such being
eligible, offer themselves for their re-appointment as Managing
Director and Whole-Time Director respectively. Their contribution to
the growth of your company has been immense. Members are requested to
consider their candidature and re-appoint them for a period of five
years effective from 1st April, 2013.
Mr. Rajesh M. Agrawal and Mr. K H Vishwanathan have been appointed as
Additional Directors by the Board effective from 30th April, 2013. The
company has received request of their candidature accompanied by a
deposit of Rs.500/- each. As such the members are requested to consider
their appointment as directors of the company.
Auditors
Your company''s statutory auditors, M/s. Kapoor & Parekh Associates,
Chartered Accountants, Mumbai, retire at the conclusion of ensuing
Annual General Meeting. Your company has received a letter from them to
the effect that their reappointment, if made, will be in accordance
with the provisions of section 224 (1-B) of the Companies Act, 1956 and
are eligible for re-appointment, holding peer review certificate. The
Audit Committee and the Board recommend their reappointment.
Auditor''s Report
The remarks as contained in the Auditor''s Report read with Notes
forming part of the accounts are self- explanatory.
Cost Auditors
Pursuant to the provisions of Section 233B of the Companies Act, 1956
and in terms of General Circular No. 15/2011 dated 11th April, 2011 and
with the prior approval of the Central Government, M/s. Sevekari Khare
& Associates, practising Cost Accountant, were appointed to conduct
audit of cost records of Bulk Drugs and Formulations for the year ended
31st March, 2013. Cost audit reports would be submitted to the Central
Government within the prescribed time.
Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011,
cost audit reports for Bulk Drugs and Formulations for the year ended
31st March, 2012 were filed with the Central Government on 2nd January,
2013.
Fixed Deposits
Your Company has not accepted any fixed deposits from the public under
Section 58A of the Companies Act, 1956.
Directors'' Responsibility Statement Your Directors confirm-
1. that in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. that the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year 31st March,
2013, and of the profit or loss account of the company for that year;
3. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities;
4. that the directors have prepared the Annual Accounts on a going
concern basis.
Employees Stock Option Scheme
During the year, no new options were granted to the employees under
Employee Stock Option Scheme 2011. Pursuant to the provisions of the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999, the details of
stock options are attached as Annexure - B to the Director''s Report.
Human Resources
Your company considers people as its most valuable resource, who play a
key role in achieving the goals of the company. Your company has been
fairly successful in attracting, retaining and developing best of the
talent. Company enjoyed cordial relations at all levels and has been
proactive to take different steps for development of its people.
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules, 1975, is available at
the registered office of the company. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the report and
accounts are being sent to all shareholders of the Company, excluding
the aforesaid information, which is available for inspection at the
Registered Office of the Company during working hours. Any shareholder
interested in such particulars may inspect the same.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The additional information relating to Conservation of energy,
technology absorption, foreign exchange earnings and outgo, pursuant to
Section 217(1)(e) of the Companies Act, 1956 read with Companies
(Disclosure of particulars in the report of the Board of Directors)
Rules 1988 is given in annexure and forms part of this report.
Corporate Governance
Report on Corporate Governance forms an integral part of this Annual
Report. Certificate from the Auditors regarding compliance of
conditions of Corporate Governance as stipulated in Clause 49 of the
Listing Agreement with Stock Exchanges is also enclosed.
Gratitude and Acknowledgments
Your Directors express their sincere gratitude to all its stakeholders,
medical professionals, business partners, government, other statutory
bodies, banks, financial institutions, analysts and shareholders for
their assistance, co-operation and encouragement. Your Directors also
place on record their earnest appreciation for dedication, hard work
and commitment of all employees.
For and on behalf of the Board of Directors,
MANNALAL B. AGRAWAL
CHAIRMAN
Mumbai, 30th April, 2013
Mar 31, 2011
The directors take immense pleasure and satisfaction in presenting the
32nd Annual Report and audited accounts for the year ended March 31st,
2011.
Financial Results (Rs. in Lacs)
Year ended 31st March 2011 2010 Growth
Total Income 46,374 38,604 20%
EBITDA 9,120 7,250 26%
Interest 1,566 1,908
Depreciation 2,379 1,976
Profit before Tax 5,175 3,366 54%
Profit after Tax 4,645 2,854 63%
Earnings Per Share 39.67 24.37
(EPS) Rs.
Dividend 50% 35% 43%
Book Value per share
(Rs. 10/- paid up) Rs. 184 150 23%
Dividend
Your Directors are pleased to recommend a dividend of Rs. 5/- per
equity share on the face-value of Rs. 10/- per share for the year ended
31st March, 2011.
Operations
It was yet another year of outstanding performance on all the
parameters, be it growth in total income and profits or bringing
efficiency by better resource management. Exports continued to lead
with its contribution of 63% and domestic business joining it to keep
the growth momentum going. The benefit of mapping the complete pharma
value chain during the previous year had shown its result in terms of
overall improvement in the operations of the company.
Management Discussion and Analysis
The Management Discussion and analysis of the operations of your
company is provided in a separate section and forms part of this
report.
Subsidiary Companies
The Central Government has granted exemption under Section 212(8) of
the Companies Act, 1956, from attaching to the Balance Sheet of the
company, the accounts and other documents of its subsidiaries. A
statement containing prescribed particulars in terms of the said
exemption and statement pursuant to section 212 of the Companies Act
1956 are annexed. Consolidated Financial Statements
incorporating results of all subsidiaries are also part of this annual
report. The company will make available annual accounts of subsidiary
companies to any member of the company who may be interested in
obtaining the same.
The performance of Mauritius subsidiary once again had been excellent
with overall growth in sales and profitability. Its Philippine
subsidiary had added to the performance but has yet to break even. US
Subsidiary continued to assist in regulatory work for companyÃs ANDA
project. Overall subsidiary performances were satisfactory.
Joint Venture
Turkmenderman Ajanta Pharma Ltd., your companyÃs joint venture in
Turkmenistan has shown no improvement in operations and your company
continues to look for exit options from the same.
Research & Development
The new expanded R&D facility at Advent became operational during the
year with renewed thrust on innovation. With more space, more
sophisticated equipments and more people, the performance of R&D had
been excellent. New product launches, process improvements, cost
savings in manufacturing, preparation for more ANDA filing were all the
activities which kept R&D busy throughout the year and assisted in
substantial financial improvement of the company.
Capital Expenditure
With the completion of new Advent, our R&D centre expansion and Paithan
plant expansion, the company has completed all its major Capex plans
during the year. Normal capital expenditure will continue in the
coming years till we plan new grass root facility.
Consolidated Financial Statements
In accordance with the requirement of Accounting Standards AS21
prescribed by the Institute of the Chartered Accountants of India, the
consolidated account of your company is annexed to this report.
Directors
Mr. Madhusudan B. Agrawal and Mr. Chandrakant M. Khetan, the Directors
of your Company, retire by rotation and being eligible, offer
themselves for re-appointment.
Auditors
The Auditors, M/s. Kapoor & Parekh Associates, Chartered Accountants,
Mumbai, retire at the conclusion of the
ensuing Annual General Meeting and are eligible for re- appointment,
holding peer review certificate. Members are requested to appoint them
as Auditors and fix their remuneration.
M/s. Sevekari Khare & Associates, Cost Auditor have been reappointed to
conduct the cost audit of the companyÃs cost records for FY 2011-12 as
prescribed by the order received from Government of India, Ministry of
Company Affairs, Cost Audit Branch, New Delhi.
AuditorÃs Report
The remarks as contained in the AuditorÃs Report read with Notes
forming part of the accounts are self-explanatory.
Fixed Deposits
The Company has not accepted any fixed deposits from the public under
Section 58A of the Companies Act, 1956.
DirectorÃs Responsibility Statement
Your Directors confirm:- 1. That in the preparation of the annual
accounts, the applicable accounting standards have been followed.
2. That the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year ended 31st
March, 2011 and of the profit or loss account of the company for that
year.
3. That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities.
4. That the Annual Accounts have been prepared on going concern basis.
Corporate Social Responsibility
During the year, your company added one more area of health, i.e.,
Jaipur foot, in addition to the existing commitment to eye surgery
camps, plastic surgery camps, etc. More than 5,000 needy patients,
especially in rural areas took the benefit of these camps in different
parts of the country. Your company reiterates its commitment towards
better health for people who cannot afford for these treatments.
Human Resources
You will be pleased to know that the team of Ajantaites
world over has crossed the mark of 3,000 dedicated and fully committed
professionals. The immense potential of this team is reflected in the
consistent performance of the company year after year. The company
recognises the contribution of this team, which knows its priority in
terms of performance orientation and best of ethics.
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules, 1975, is available at
the registered office of the company. However, as per the provisions of
Section 219(1) (b)(iv) of the Companies Act, 1956, the report and
accounts are being sent to all shareholders of the Company, excluding
the aforesaid information, which is available for inspection at the
Registered Office of the Company during working hours. Any shareholder
interested in such particulars may inspect the same.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The additional information relating to Conservation of energy,
technology absorption, foreign exchange earnings and outgo, pursuant to
Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the report of the Board of Directors)
Rules, 1988 is given in annexure and forms part of this report.
Corporate Governance
Report on Corporate Governance and Certificate from the Auditors
thereon regarding compliance of conditions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement with Stock Exchanges
are enclosed.
Gratitude and Acknowledgments
Your Directors wish to thank all stakeholders, medical profession,
business partners, government, other statutory bodies, banks, financial
institutions and shareholders for their assistance, co-operation and
encouragement. Your Directors also place on record their sincere
appreciation for significant contribution made by the employees at all
levels through their dedication, hard work and commitment and look
forward to their continued support and unstinting efforts in ensuring
an excellent all round operational performance.
For and on behalf of the Board of Directors,
MANNALAL B. AGRAWAL
CHAIRMAN
Mumbai, 30th April, 2011
Mar 31, 2010
It is with great pleasure and satisfaction that your Directors present
the 31st Annual Report and audited accounts for the year ended March
31st, 2010.
Financial Results Rs. in Lacs
Year ended 31st March 2010 2009
Total Income 38,477 32,380
EBITDA 7,250 6,112
Interest 1,908 2,203
Depreciation 1,976 1,315
Profit before Tax 3,366 2,594
Profit after Tax 2,854 2,138
Earning Per Share (EPS) Rs. 24.37 18.26
Dividend 35% 25%
Book Value per share 150.24 129.95
(Rs.10 paid up) Rs.
Dividend
Your Directors are pleased to recommend a dividend of Rs. 3.50 per
equity share on the face-value of Rs.10/- per share for the year ended
31st March 2010.
Operations
An excellent performance for the year, with 33% growth in net profit
and 19% in sales reflects your companyÃs robust business model. Exports
constituted 61% of total sales with establishment of your companyÃs
brands in the global markets. Exchange rate movement, though remained
the area of concern, was contained through a systematic hedging policy,
to avoid adverse impact on profitability Your company was able to
contain the interest cost during the year, thanks to better cash flow
and cooperation extended by its bankers. Various projects and capital
expenditure plans have been completed during the year, which has
resulted in higher depreciation cost. Overall, your company has
improved on its profitability during the financial year ended March 31,
2010.
Management Discussion and Analysis
The Management Discussion and analysis of the operations of your
company is provided in a separate section and forms part of this
report.
Subsidiary Companies
The Central Government has granted exemption under Section 212(8) of
the Companies Act, 1956, from attaching to the Balance Sheet of the
company, the accounts and other documents of its subsidiaries.
However, the
Consolidated Financial Statements of the Company, which include results
of the said subsidiaries, are included in this Annual Report. Further,
a statement containing the particulars prescribed under the terms of
the said exemption for each of the CompanyÃs subsidiaries and statement
pursuant to Section 212 of the Companies Act, 1956, are annexed. Copies
of the audited annual accounts of the subsidiaries can be sought by any
investor of the Company on making a written request to Company
Secretary at the registered office of the company in this regard. They
are also available for inspection for any investor at the CompanyÃs
registered office.
Once again your companyÃs Mauritius subsidiary has shown an excellent
performance with a growth of 32% in sales and 13% in profits. Its step
down subsidiary in Philippines had just commenced its operations and
will add to the performance during next financial year. Your companyÃs
subsidiary in US had been playing an important role in filing ANDA
registration and USFDA approval.
Joint Venture
Joint Venture Turkmenderman Ajanta Pharma Limited, though continued its
operations during last calendar year, its performance had been much
below our expectations. Your Company continues to look for exit
options from this Joint Venture.
Research & Development
R & D remains the prime focus of your company, with facility at Advent
in Mumbai being further expanded to meet the growing needs of different
markets. During the last financial year, R&D had filed 2 ANDA
applications with USFDA and working on few more in the current year. It
had also been instrumental in launching many new products in the
markets, some of them being amongst first to be in launched.
Capital Expenditure
During the last financial year company acquired a formulation facility
near Aurangabad to augment its manufacturing capabilities, specially
for rest of the world markets. The API manufacturing facility also
commenced its operation during the year, marking a major step in the
direction of mapping the complete pharma value chain.
Consolidated Financial Statements
In accordance with the requirement of Accounting Standards AS21
prescribed by the Institute of the Chartered Accountants of India, the
consolidated accounts of your company is annexed to this report.
Directors
Mr. Santosh Bhattacherjee, Nominee of IDBI Bank Limited ceased to be
the Director of the Company during the year. The Board places on
record their sincere appreciation and gratitude for all support and
valuable contribution made by him during his association with the
Company. Mr. S. C. Saha was appointed as the new Nominee Director by
IDBI Bank.
Mr. Mannalal B. Agrawal, Mr. Purushottam B. Agrawal and Dr. Anil Kumar,
the Directors of your Company, retire by rotation and being eligible,
offer themselves for re- appointment.
Auditors
The Auditors, M/s. Kapoor & Parekh Associates, Chartered Accountants,
Mumbai, retire at the conclusion of the ensuing Annual General Meeting
and are eligible for re- appointment, holding peer review certificate.
Members are requested to appoint them as Auditors and fix their
remuneration.
AuditorÃs Report
The remarks as contained in the AuditorÃs Report read with Notes
forming part of the accounts are self-explanatory
Cost Audit
M/s. Sevekari Khare & Associates, Cost Auditor have been reappointed to
conduct the cost audit of the companyÃs cost records for FY 2010-11 as
prescribed by the order received from Government of India, Ministry of
Company Affairs, Cost Audit Branch, New Delhi.
Fixed Deposits
The Company has not accepted any fixed deposits from
the public under Section 58A of the Companies Act, 1956.
DirectorÃs Responsibility Statement Your Directors confirm:-
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed.
2. That the directors have selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year ended 31st
March, 2010, and of the profit or loss account of the company for that
year.
3. That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities.
4. That the Annual Accounts have been prepared on going concern basis.
Social Responsibility
Your company is committed to its social responsibility and continues to
be a responsible corporate citizen. As in the earlier years, your
company had been working on free corrective plastic surgery and eye
surgery camps, blood donation camps, etc. for the needy and rural
population in different parts of the country
Particulars of Employees
As required under Section 217(2A) of the Companies Act, 1956 and Rules
framed thereunder, the names and other particulars of employees
receiving remuneration above the prescribed threshold are set out in
the Annexure appended to this Report.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The additional information relating to Conservation of energy,
technology absorption, foreign exchange earnings and outgo, pursuant to
Section 217 (1)(e) of the Companies Act, 1956 read with Companies
(Disclosure of particulars in the report of the Board of Directors)
Rules, 1988 is given in annexure and forms part of this report.
Corporate Governance
Report on Corporate Governance and Certificate from the Auditors
thereon regarding compliance of conditions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement with Stock Exchanges
are enclosed.
Gratitude and Acknowledgments
Your Directors take this opportunity to express sincere thanks to the
medical fraternity and patients for their continued co-operation,
patronage and trust reposed in the Company and its products. The
Directors place on record their gratitude to the government, other
statutory bodies, our strategic partners, business associates, banks,
financial institutions and shareholders for their assistance,
co-operation and encouragement. Your Directors also place on record
their sincere appreciation for significant contribution made by the
employees at all levels through their dedication, hard work and
commitment and look forward to their continued support and unstinting
efforts in ensuring an excellent all round operational performance.
For and on behalf of the Board of Directors,
MANNALAL B. AGRAWAL
CHAIRMAN
Mumbai, 6th May, 2010
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